In a perfect world, government would attract and support businesses of any size by keeping taxes low, services high and infrastructure maintained. Government would not put its thumb on the scales of the market by offering tax rebates except in the rare circumstances that the incentive would advance a clear social goal that would not advance without the tax intervention. But, the world is not perfect and the use of tax rebates to lure or retain companies has become too common.
To manage these increasingly common requests for tax rebates, I have developed along with my colleagues on the Court a policy inviting companies to participate in social goals in exchange for tax rebates above a basic level. If expanding the tax base is all the company offers, the basic rebate is comparatively low.
But, if the company does more – if it brings jobs for Travis County residents, pays wages of at least $11 an hour, locates in a preferred area, hires from economically disadvantaged residents, builds environmentally sustainable facilities, or mentors and educates young people in the field in which the company excels – the rebate is higher and we as a Court are more likely to support it.
Under these criteria, I support National Instruments' application for a tax rebate. The tax rebate is comparatively low at 40% over ten years. The company agrees to pay at least $11 an hour to its own employees as well as contract workers. It seeks to expand in an already existing population center and is considering building to LEED Silver standard. And, it has a long track record of mentoring and educating young people in the science, technology, engineering and math (STEM) fields. Additionally, it is a homegrown company that has been here since 1974 without previously asking for a tax rebate.
We cannot know whether National Instruments would have expanded in Malaysia instead of Travis County if we did not rebate some of its taxes. But, in adhering to our new Economic Development policy, we know that National Instruments' business practices are in harmony with Travis County's social goals.