From the President

Recently, San Patricio County has had several new industries start up in the county that have requested tax abatements. Tax abatements can be great tools for small counties that normally don’t have the funds to attract major businesses. Tax abatements offer the county and the businesses the opportunity to work together and to both benefit from the abatements. Tax abatements also help the companies by offsetting the cost of construction during the time the company is not making a profit from the facility. The companies normally become profitable within two-three years. After the first two-three years the companies start paying a percentage of taxes to the county. During the next few years the terms of the abatement start to end. This then creates new taxable property for the county. The abatements often attract the larger companies, which in return allow smaller companies to co-locate and expand off of the already-existing companies.
While there are several benefits for businesses that receive tax abatements, there are also benefits for the residents of the county and residents of the area that is being developed. Some of the benefits to the residents of the new development area are expanded retail and commercial business, and a more attractive community as additional developers come onboard. Another benefit is that the homeowner’s property tax increase should be minimal. The tax abatement will also allow the opportunity for smaller businesses to grow and for new jobs to be created.
During the time I have been in office, several tax abatements have run their course. During the last 16 years the tax abatements allowed the county to give homeowners and other businesses a reduction in tax rates. Without tax abatements, the county may not have any option but to increase the tax rates. Not raising the tax rates makes it easier to come to work each day, and it helps keep all the elected officials in office!
There are many reasons to implement tax abatements, but it is up to the individual counties to make that decision. By doing this it will not hurt the county but only help establish a better lifestyle for the residents of the county and help the local economic development process.
Terry Simpson