Austin ISD school board rejects tax break for semiconductor company

The Austin ISD school board has voted against a multi-million dollar tax break for NXP, a semiconductor company. 

A group called Central Texas Interfaith claims the tax break would have taken money away from schools. 

"It is not fair that those who have the greatest ability to pay are the ones who don't want to pay a dime," Rev. Minerva Camarena Skeith of Central Texas Interfaith said. 

The tax break called the appraised value limitation, or 313 agreement, lets potential businesses build property and create jobs in exchange for a 10-year limit on the taxable property value for school district maintenance and operation. 

"We want more dollars for AISD and for every school district in this state. We want every child to have every opportunity they need," Rev. Miles Brandon with Central Texas Interfaith said. 

The meeting agenda says the proposal would be a net benefit to the school district.

The appraised value limitation program won't continue because it didn't pass last legislative session, but applications can still be approved this month.

"When a corporation gets a tax break, the rest of us have to make up the difference," Skeith said. 

Some in public comment voiced their support for the proposal. 

"I ask you to vote in favor of this agreement, because it will, as you know, provide over $60 million of new funding that you can use to invest in teachers and students," one public commenter said. 

NXP says: "NXP’s Chapter 313 proposal would provide AISD with an estimated $63.5 million in discretionary revenue that would not be subject to state recapture, allowing the district to use the money as it wishes. That could include increasing teacher pay, adding campus counseling resources, improving student outcomes, or expanding technical and career education.

Furthermore, if AISD approves NXP’s 313 application, it will have no impact on funding for schools outside of Austin. The State of Texas funds education statewide primarily by applying a school funding formula based on Average Daily Attendance (ADA) (i.e. per pupil). This funding formula is not impacted by the amount of AISD’s recapture payment to the State of Texas. In fulfilling their responsibility to do what is best for Austin students and schools, the trustees are in no way depriving students and schools outside of Austin of resources.  With the potential funds, AISD would be able to support some of the district’s strategic priorities, such as raising teacher and staff pay, potentially developing teacher housing and increasing access to high-quality academic programming. 

NXP has deep roots in the Austin area going back over 50 years, and has had a rich history of engagement and advocacy in many different communities across Austin. NXP employs thousands of employees across its two sites, many of them are parents of past, present and future AISD students.  NXP hopes to strengthen its long-term commitment to Austin as it expands its manufacturing footprint in the Austin community and create good-paying jobs with benefits."

"We've seen no financial commitments. We haven't seen a schedule," Brandon said. 

If the proposal didn't pass, NXP says: "It will be unlikely for NXP to expand in Austin without local incentives as these are required to obtain CHIPS Act funding upon which NXP’s hope for investment is contingent. NXP is evaluating its global manufacturing operations to determine which locations could accommodate a potential expansion."