Colleyville state Sen. Konni Burton and Fort Worth state Rep. Charlie Geren have had a war of words over whether offering tax incentives to lure Facebook’s $1 billion data center to Fort Worth was a good idea.
Both have strong philosophical arguments, but Geren is far better grounded in reality.
Philosophically speaking, we all might lean in Burton’s direction when she says “government — state or local — shouldn’t subsidize private companies that have the financial assets to relocate on their own.”
That’s what she wrote in a July 10 commentary published by the Texas Tribune. It’s wishful thinking.
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Facebook, which earned $12.5 billion last year and posted $2.9 billion in profit, and other businesses know full well that a project like this brings real economic value to any city. They want help with the cost of the investment.
Facebook vetted more than 200 sites before choosing Fort Worth. Burton is suggesting that the city, Tarrant County and Texas should sit back and wait for Facebook to refuse all other offers and locate here because they love us.
Was Fort Worth’s offer of $146.7 million in tax exemptions over 20 years excessive?
“They asked for more than they got,” says Mayor Betsy Price. She added that city officials were told they would lose the deal if they didn’t come up with more, but they refused.
For Geren’s part, he wrote in a Friday commentary in the Tribune that Facebook doesn’t get a free ride. Even with the incentives, Fort Worth’s property tax revenue on the Facebook site will rise from the current $2,720 a year to an average of more than $2.4 million a year over 20 years.
Burton is off-base when she says the incentives are “taxes that fund our public schools.” The 110-acre project is in the Northwest school district, which is giving up none of its property tax revenue.
Geren says the school district will collect more than $150 million in taxes on the site over the next 20 years.
Burton says, “I wish I could celebrate” the Facebook deal. She should.