We had a briefing today in the Council’s Economic Development Committee to discuss the city’s incentives program to attract and keep businesses in Dallas. I wanted to give a quick overview of that program.
Here are the ways Dallas can attract and keep businesses:
– Tax Abatements
– Development Fee Rebates
– Infrastructure Participation
– Right-of-Way Abandonment Fee Rebates/Credits
– Tax Increment Financing Districts
– Public Improvement Districts
– Consideration of Grants and Loans
The city will not give incentives unless the business project would not occur, or would be substantially less beneficial to the city, “but for” the incentives.
The thing that struck me the most about this briefing relates to tax abatements. Tax abatements reduce the amount of property taxes that a business pays to the city for a specified period of time.
Residents often ask me how much money the city “loses” each year due to business tax abatements. There are currently 75 active business tax abatements that resulted in $8.7 million in forgone revenue in 2005. (Texas Instruments’ abatement accounted for $6.3 million or nearly 72% of this amount. Texas Instruments’ abatement will expire after 2007 resulting in the City receiving this tax revenue in FY08-09.) Without Texas Instruments, the city is abating $2.4M a year for businesses. To put that inperspective, our city’s annual budget is $2.2 billion.
Since 1990, the City Council has considered business incentives for over 200 projects with over $4.5 billion in new investment and over 50,000 jobs created or retained.
Since 2003, the City Council has considered incentives through the Program for 19 projects with an associated $429 million in new investment and 5,000 associated jobs.
I would prefer we didn’t have to offer any incentives to keep and attract businesses to our city. Unfortunately, comparable cities around the country, as well as neighboring suburbs, offer incentives, and we have to level the playing field. You may view a list of incentives provided by other Texas cities and other national cities on pages 11 and 12 in the briefing.