Investing in the future with decade-long abatement
Published 10:26 am Thursday, September 27, 2018
By Lorenzo Salinas
Port Arthur Independent School District is looking to invest in the future with another big tax abatement for business.
During Tuesday’s regular board meeting at the Administration Building on Ninth Avenue, PAISD trustees entertained a hearing from Premcor Refining Group, Inc. regarding the creation of a reinvestment zone with the school district.
Premcor, a refining company that was bought out by Valero in 2005, operates a refinery in West Port Arthur. Representatives from the company submitted an application to the board for an appraised value limitation on certain parts of its property in regards to Chapter 313 of the Texas property tax code.
The board approved the acceptance of the application Tuesday evening, which the superintendent would review later to submit to the Texas comptroller for evaluation. If approved by the comptroller, both the district and Premcor would benefit from the agreement.
Superintendent Mark Porterie estimated the school district would receive about $900,000 a year once the Chapter 313 agreement would go into effect.
“We would give them a tax abatement toward the end of the project,” he said. “No matter how much the expansion was worth, we would only tax them on $30 million during the 10-year abatement.”
Chapter 313 is a tax incentive for businesses to invest in new projects and/or expansions within the state. It differs from Chapter 312 agreements in that school districts are allowed to offer the abatement.
It is a temporary agreement between businesses and school districts that could extend to 10 years for an estimated $10 million to $100 million taxable value on manufacturing and project costs for a company.
In return, a school district’s local property tax collection would go up along with a corresponding reduction in state aid. At the end of the 10-year agreement, the district would see a larger reduction in state aid or an increase in recapture payments as a result of the additional property value to its tax roll.
Port Arthur ISD’s 313 agreement with Motiva expired this year and, as a result, would force them to pay recapture to the state as a Chapter 41 district.
Porterie said the agreement with Premcor would not go into effect until late 2019, and that the district would not see a financial benefit from it until 2022.
In other agenda items, the board approved the submittal of a maximum class size exception waiver for Robert E. Lee and William B. Travis elementary schools to Texas Education Agency.
The waiver concerned grades K-5 and would allow the schools to go beyond the state-allowed 22-to-1 student-to-teacher ratio.
Porterie said some of the classes within the schools could reach 23-to-1, and that a possible solution would be to bring in more teachers to bring that ratio down.
The board also approved the purchases of furniture for Tyrrell Elementary, educational software for various schools and electrical work for lighting upgrades at the Memorial Stadium Football parking lot.
