Big Businesses Bite the Hand that Feeds Them

Legislative leaders have recently told TML staff that large, industrial businesses are working aggressively behind the scenes in support of S.B. 2 and H.B. 15, bills that would impose state restrictions on the revenue and budgets of every city in the state.  These industries are overlooking how heavily they rely on city services and infrastructure in the daily operations of their businesses – everything from police and fire protection for their offices and their employees to the roads they use to provide their services or move their goods.  And many large businesses have received tax-related economic development incentives that directly benefit their bottom line.

Photo of oil refinery in foggy sky If the city budget restrictions in S.B. 2 or H.B. 15 become law, they will limit the ability of cities to fund economic development projects, grant tax abatements to businesses, or make transportation improvements that benefit businesses.

City officials should immediately begin to discuss continued participation in economic development incentives, especially tax incentives, in light of the fact that some industries appear to be supporting budget restrictions on cities.

Large industries should also realize that economic development incentives are under direct attack by certain legislators as well.  Historically, the League has been aligned with business in support of targeted incentives to create jobs and expand the Texas economy.  That cooperation is threatened by business support for restrictions on the property taxes that underlie such incentives.

The threat posed by possible passage of revenue caps by the legislature in the next two months should cause cities to consider placing on hold any action on granting incentives at least until the end of the Legislative session on May 29, 2017.

Any city that passes resolutions, moratoria, or takes other action regarding the granting of incentives in light of industry support for S.B. 2 and H.B. 15 should share those with Bill Longley, TML Legislative Counsel, at

TML member cities may use the material herein for any purpose. No other person or entity may reproduce, duplicate, or distribute any part of this document without the written authorization of the Texas Municipal League. 

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