The plan prioritizes helping local businesses start and scale up, workers’ financial empowerment, place making and improved mobility.
The vote comes after the Commissioners Court directed staff in 2017 to develop a comprehensive strategy and, more recently, revise the county’s economic development incentives policy and suspend accepting any new applications for such breaks.
Currently, the county oversees seven economic incentive—or property tax rebate—agreements. The costliest agreement is with Samsung, a company to which the county has rebated $65 million since 2009. The agreement expires in 2027.
Commissioners attributed their direction, in part, to a new state law that caps local taxing entities from growing their property tax revenue by more than 3.5% year over year, down from the current rate of 8%.
“We simply cannot afford to give preferential tax treatment to our wealthiest corporate citizens, or prospective wealthy corporate citizens, under a 3.5% revenue cap,” County Judge Sarah Eckhardt said at a July 30 Commissioners Court meeting.
In response, staff developed a revised policy regarding economic development incentives.
The new revisions include improving enforcement to ensure recipients are in compliance with the terms of any incentive agreement and ensuring the benefits of the tax rebate offset the loss of property tax revenue, according to a brief prepared by county staff.
“I think that it is sound policy to make sure that we are attracting businesses that are going to help build communities,” Precinct 1 Commissioner Jeff Travillion said at the Dec. 17 meeting. “And we need to think about where they’re located.”
Commissioners also requested an update on the suspension of the county’s economic incentives program in July.
Staff reported research shows economic incentive policies similar to Travis County’s “do not necessarily provide an equal benefit to the County compared to the cost of taxes foregone” or “ influence company location choices,” per the brief.
Further, data shows that many companies relocate to Travis County without any incentives, staff added.
With commissioner approval for the new economic development strategic plan, staff will continue to research and consider revisions to the county’s economic incentives policy to ensure it aligns with plan goals.
In the brief, staff lays out potential additional revisions, including incentives that help reduce racial and socio-economic disparities and negative environmental effects.
Such incentives will require coordination across departments, such as health and human services and transportation and natural resources.
“We’ve already learned some lessons procedurally as we’re looking through different deals where we need to make sure that if it’s not in our wheelhouse for compliance; it requires collaboration with another department that we have those procedures in place,” Christy Moffett, the county's managing director of economic and strategic planning, told commissioners.