Saturday, September 7, 2024
The Hood County Commissioners Court voted 3:2 to adopt a tax abatement policy during a regularly scheduled meeting July 9.
The policy — which aims to offer reduced property taxes to eligible businesses — was implemented by the court with the goal of potentially bolstering economic growth in the county.
According to the resolution, members of the court believe tax abatements within specified guidelines and criteria will attract and retain desirable commercial enterprises in Hood County, thereby serving as a crucial tool for contributing to the county's economic development.
“I've stood up here and stated publicly and adamantly that low taxes are the driving economic factor for this county, and I think that's the thing that we need to focus on,” Precinct 1 Commissioner Kevin Andrews said, during the meeting.
The agenda item was initially tabled during the last Hood County Commissioners Court meeting June 21 to account for changes on the proposed policy. Due to the fourth iteration of the policy, Hood County resident John Highsmith compared the agenda item to a horror movie, noting that it keeps coming back for worse.
Highsmith said that while reinstating policies doesn't guarantee all tax abatements will be granted, having a policy in place would make any company foolish not to at least consider seeking a tax abatement upon entering Hood County. He also questioned the belief that offering tax abatements will give Hood County a significant economic advantage, when it’s likely to occur regardless.
"If they see that (an abatement) is out there, it's there for the asking and they're going to ask for it, so I think you're going to get a lot of companies that would otherwise go into Hood County — a low tax county — and say, ‘Hey, can we have that, too?” he said. “I don't understand why you think this is going to be necessarily a big advantage for Hood County in trying to do economic development. You're going to get the economic development; you don't need the tax abatements.”
Resident Robert Tabor expressed his general opposition to tax abatements, referring to them as corporate welfare, drawing on his experience in corporate acquisitions.
Tabor also raised concerns about Andrews removing specific types of desired Hood County industries from the policy. He argued that by defining the county’s preferred industries in the policy, it would attract more of those companies to the area — especially if they’re considering relocating.
"If you know what type of industries you want here that you think are great for this county, why not list them?” he asked. “I mean, when companies start looking at areas to relocate, they're going to look at if you have guidelines for abatements and what kind of deals you can offer them. But you need to understand and control what you want in (Hood County).”
Following Tabor’s comments, Andrews addressed some of his generalities — like removing the preferred industries from the policy — stating that he doesn’t want to paint himself into a situation where he has to give an abatement to a company.
"With (the policy) being a little bit more vague and a little bit more general, it gives us more latitude to deny," he said.
Hood County Judge Ron Massingill said he agreed with Tabor that businesses typically evaluate whether a county offers an abatement policy before selecting that location for their operations.
"If it doesn't have an abatement policy, there are going to be plenty of other counties that do have an abatement policy, so they're going to skip over that county,” Massingill said. “I think everybody up here, all of us on this bench here, are going to take a very, very hard look at anybody being entitled to an abatement as to what it does for the good of Hood County, before we're going to give anybody any kind of a tax break; it's got to be for the benefit of Hood County, and there's a million factors that can go into that.”
Precinct 4 Commissioner Dave Eagle said he disagreed with Massingill’s perspective, asserting that the county government's role should not interfere in business operations and private property rights.
“This is with all due respect, but the more I've looked into this, the more I'm just flat out against an abatement policy,” he said, adding that he aligns his views with the Republican platform's principle of reducing government involvement in business affairs. “I think that any kind of abatement policy is ill advised, but that’s just me.”
Precinct 2 Commissioner Nannette Samuelson then highlighted Hood County’s rapid growth and the county’s infrastructure needs, like additional schools and road improvements. She also brought up how the county has one of the lowest, if not the lowest, tax rates compared to neighboring counties, which already serves as a strong economic draw.
“This is already an economic incentive,” she said. “If businesses are looking to come here, they're going to see that and they're going to see the job base here. It's not the government's job to pick winners and losers. We already know there's growth. The employment base is here, industries will go where there's an employment base, an economically favorable environment, and a low tax rate — that's Hood County.”
Saying competition is what it’s all about, Massingill added that if Hood County adopted a tax abatement policy, it would be “in the game” with neighboring counties like Johnson, Erath and Parker.
While he said he was personally not in favor of tax abatements, Massingill said he would support them if they clearly benefited Hood County residents.
“If there is a benefit to the people of Hood County, I want to be able to — and I think it's our fiduciary duty — to take that benefit for the people of Hood County,” Massingill said. “I'm not going to be bound by any doctrine that's just going to say, ‘I don't care what kind of benefits this business would bring to Hood County, we're not going to give you a tax abatement.’ That's why I'm saying that you got to look at each project, each business, each thing on an individual basis and make the best decision for the people of Hood County ... I think that an abatement policy is something that we do need, but then you have very stringent requirements that a business must make before they're entitled to an abatement.”
Andrews then made a motion to approve the tax abatement guidelines as presented. Following a second from Precinct 3 Jack Wilson, the motion carried 3:2, with Eagle and Samuelson voting, “No.”
POLICY INFO
Tax abatement applicants shall complete the Hood County Application for Economic Development Incentives found on the Hood County website and include a payment of $1,000.
Once an application has been submitted, the Hood County Commissioners Court shall review any requests for a tax abatement. The court then decides whether economic development incentives should be offered in each individual case. The court's recommendation shall be based upon a subjective evaluation of the following criteria: employment impact, fiscal impact and community impact.
The tax abatement policy states that Hood County is not under any obligation to provide a tax abatement to any applicant, and that all applications will be considered on a case-by-case basis.
These guidelines and criteria herein follow Section 312 of the Texas Tax Code and shall be effective from the date of passage and remain effective for two years from such date of adoption unless otherwise amended or repealed by a three-fourths vote of the commissioners court. Even if deferred, the abatement period may not exceed 10 years.
Sections 312.402(a-2) and 312.204 of the Texas Tax Code detail the entities that are authorized to request tax abatements, the duration of the abatement period, and the specific conditions to be met.
For more information about the tax abatement, visit the Hood County Commissioners Court agenda for July 9 and click on the link next to agenda item No. 2 under “VII: Miscellaneous Business to be discussed and considered for approval” to see the full policy document.
