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Austin, Texas' Problems Could be Solved With Fewer Tax Rebates to Large Corporations

Posted by 
Carol Lennox
Carol Lennox
 2021-05-16

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Downtown Austin, Texas by @_jeremybanksPhoto by Jeremy Banks on Unsplash

In my lifetime, Austin, Texas has gone from sleepy college town known for local music, to fast-paced city overflowing with traffic, homelessness, and lack of affordable housing for the middle class. While Austin is considered the Music Capital of the World, many musicians can no longer afford to live here.

Much of what drew people to Austin in the first place is no longer a part of the charm of the city. Traffic is every bit as jammed as in L.A., and while live music is coming back, some of our home-grown musicians have had to move far into the suburbs, or to other cities or states to find housing they can afford. Funky little family-owned shops and iconic, historical music venues and restaurants have disappeared, including Threadgills which opened in 1933 as a gas station selling beer. Over the years music jams began happening there, and it showcased Willie Nelson and Janis Joplin among a host of others. It permanently closed in March 2020, a victim of the pandemic, but also of rent increases and escalating property taxes.

During the time Threadgills and others were going under, 154 large companies relocated to or expanded in Austin. 45 of those relocated here, according to KVUE and the Austin Chamber of Commerce. While residential and local business property taxes rise consistently, corporations get huge tax breaks. KVUE Defenders found that currently "Austin has 9 active incentive agreements totaling more than $112 million dollars."

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Graph of growth of business in Austin, Texas.Graph from KVUE and Austin Chamber of Commerce

Tax incentives are used to tempt large corporations to move to a specific city rather than the other cities being considered. It's one of the reasons Tesla, Apple, Google, Oracle and others chose Austin.

What happens though, when the increase in population brought in by huge companies makes housing scarce and home prices skyrocket? When the additional strain on schools and hospitals must be absorbed by homeowners through higher property taxes? How far could $112 million go toward funding social services?

Austin Social Justice Coalition has asked the large tech companies to donate $100 million to help build permanent supportive housing for the homeless. A percentage of the homeless population lost their jobs and homes during the pandemic. At the same time corporations were moving to Austin to take advantage of the tax breaks the city offers. Austin Justice Coalition believes in fairness the corporations should give back to the community they've chosen to become their own.

While fewer tax rebates to large corporations would slow growth, reduce the demand for the limited housing available, decrease polution and traffic, tax rebates are unlikely to end. The city governent sees dollar signs and unlimited growth. Therefore, as Austin Justice Coalition points out, the least these companies can do is donate to house the homeless. Like Oracle did when they located in Austi, Texas, they may also want to build their own housing.