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Travis County Apple tax rebate could add up to 80 percent

Monday, April 9, 2012 by Michael Kanin

The Travis County Commissioners Court is prepared to offer Apple, Inc. up to 15 extra percentage points in tax rebates if the firm can prove that it’s hired a to-be-determined specific number of low income employees for its new Americas Operations Center. Should the county and Apple agree to the incentive, the agreement could allow the company to hire low income employees on its own, as opposed to going through Workforce Solutions.

 

The low income hiring rebate will come on top of a 60 percent base rebate and a five to 10 percent rebate Apple can earn for constructing its facility to LEED energy efficiency standards. In all, it is estimated that the company could save roughly 80 percent in Travis County property taxes over a 10-year period.

 

The county has yet to reach an agreement with the company. Both the City of Austin and the State of Texas have each already agreed to contribute some level of incentives to the project, which would locate the operations center in far north Austin. Travis County Commissioners are expected to take up the agreement again on April 17.

 

Last week, the court heard from a host of parties ranging from the sitting Mayor Pro Tem of PflugervilleVictor Gonzales, who reminded the court that he is running for Ron Davis‘ Precinct 1 seat – to a robust contingent from the Austin Chamber of Commerce, all arguing for the deal. Austin City Council candidate Laura Pressley, former Travis County Judge Bill Aleshire, and developer Ed Wendler, Jr. all showed up to speak against handing the company an incentives package.

 

Travis County Judge Sam Biscoe sent a letter to Apple on Feb. 21, in which he laid out the initial terms of a potential deal, offering an 80 percent rebate, and outlining a series of conditions that Apple would have to adhere to.

 

Among the conditions is the request – which the Judge calls an “obligation” in the letter — that Apple “create and retain an additional 3,635 net new employees with an average annual wage of $54,000.” These figures would appear to be in line with those required by the City of Austin as part of their incentives package (See In Fact Daily, March 23, 2012).

 

The Austin City Council approved its Apple package on March 22. It includes $8.6 million in tax rebates over 10 years.

 

Though the City Council acted quickly to approve their deal, Commissioners Court– who is no doubt feeling pressure from community members who would like the agreement to move forward – is taking its time. In an interview last week, Commissioner Sarah Eckhardt told In Fact Daily that the 15 percent low-income hire rebate was on the table “because otherwise, we’re giving them a rebate for being Apple.”

 

In a March 29 statement, Eckhardt expressed her concerns about the deal. “The best ways for county government to attract and support businesses of any size are to keep taxes low, services high and infrastructure well maintained,” she wrote in an email. “Preferential tax treatment of wealthy corporate citizens erodes a county’s ability to do these things. Therefore, preferential tax treatment should only be entertained where the foregone taxes will ‘buy’ a greater public good that the market isn’t supplying on its own, such as competitively-priced clean energy technology, rehabilitation of a blighted neighborhood or jobs for the economically disadvantaged.”

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