The Houston City Council is set to vote Wednesday on an update to its tax abatement ordinance. A tax abatement is a tax break the city offers to encourage companies to move to Houston. Taxpayers cover the difference, and in exchange, companies promise to build, invest and bring jobs to the city.
Council Member Alejandra Salinas, who helped create the update, said the city wants to enforce requirements on companies that get breaks instead of relying on their promises. She said most Texas cities have similar ordinances and that Houston's update would put it on equal footing.
A review of city records found that only 21 tax breaks have been awarded since 2004. The review also found the city extended investment deadlines several times when companies could not meet them. The Mayor's Office of Economic Development is responsible for making sure deals are followed, and would continue to be under the update. Salinas said the office decides whether to audit companies, and that council members should hold the department accountable.
The mayor and the Office of Economic Development did not respond to questions about how they ensure companies follow the rules. It is unclear whether they plan to change their review process if the ordinance passes.