City gets Weed Eaters, while Valero get the cash
Recent media reports tout Valero Energy' donation of four Weed Eaters to the city for the "One Block at a Time" cleanup program. This donation is peanuts compared to the corporate welfare enjoyed by Valero at the city's expense.
Port Arthur utilizes tax abatements as an incentive to lure industrial expansions. These agreements tax industry at a rate of 75% of their appraised property value. Valero however, gets an even better deal. At 65% of value, they pay only forty nine cents per 100 dollar evaluation, instead of seventy six cents per hundred. Contrast this with the average property tax payer who, without any tax breaks, pays 100 percent of value.
Under its previous ten year tax agreement, Valero paid no taxes to the city the first two years. For years 3 thru 6, they paid $698,000 on value of $300 million dollars (or roughly 1/4 of 1% of value). For years 7 thru 10, their yearly payments increased by only $174,000 to $872,000. During this same period, Valero's facility more than doubled in value from 300 to 640 million dollars. Doing the math, Valero paid only 18% of the tax rate, receiving a tax break of 82 percent!
Port Arthur is faced with a storm of economic proportions. Conservative estimates show the city needs at least 400 million dollars for water, sewer, and street improvements Add to that at least 80 million dollars needed for present and future retiree benefits.
The solution is simple; industry should either pay its fair share of taxes, or substantially increases the number of Port Arthur citizens and firms who work in its facility.
In a city saddled with 13% unemployment while industry produces tens of billions in industrial expansion, life should be better.
John Beard, Jr.
Councilman, District 5
Port Arthur, TX
jbeardjr@portarthur.net







dburgat – added on July 29, 2009 at 7:17 AM
Rep. John Beard, Jr. – added on June 19, 2009 at 12:57 PM
dragon65 – added on June 17, 2009 at 11:01 PM
No disrespect ment to my industry friends, but you must understand that given the sacrifice in desperately needed revenue via abatement, we recieve very little of the 'promised' jobs and business development as a return benefit. Abatement works best when there are measurable returns for the tax dollars lost from discounted, abated taxes in the form of increased employment and economic activity for the entity giving the abatement. In exchange, we expect a significant number of jobs,contracts for our businesses. The reality is that Port Arthur citizens hold a considerablylesser percentage of the jobs versus those held by non-residents. Combined with 16% unemployment, you have the makings of economic disparity. This evidenced in the lack of population growth, development and economic vitality. This city lags behind other area cities in key economic indicators as in household income,per capita income, property value,ect. Without secondary derrived benefits, the city's economy suffers, resulting in budget shortfalls,limited means to provide services and 'langnaippe' projects that enhance the quality of life.
Without meaningful direct benefits that are received in exchange for tax breaks from its largest employers, there is no value in giving tax abatements. True ,we need to expand our economic base, but that's difficult in a depressed economy. We will not give up the spinoff derrived from abatement, but if we gain no benefit,what good is abatement?