- Associated Press - Friday, November 21, 2014

DALLAS (AP) - State Auditor John Keel is criticizing an economic development program run by Texas school districts, saying they’re being passive about checking whether companies actually are creating high-paying jobs as promised.

Keel’s report was released Friday. Keel was required to audit the program, known as “Chapter 313,” as part of a law extending it through 2024.

He said districts are giving away more than $200 million a year in property tax breaks without confirming if the businesses are creating the pledged jobs.

“The school districts relied primarily on information that the businesses certified to be true and correct,” Keel said.

He recommended the Legislature require independent verification and urged lawmakers to set tighter policies on school board members and district employees who handle tax break applications.

Keel analyzed four school districts’ practices in his audit and found inconsistent reporting of information on amounts invested and jobs spun off. He examined a research facility in Austin; two wind farms in Sterling City; a natural gas processing plant in Fort Stockton; and two nuclear power generating units in Matagorda County.

Keel’s audit said the school districts in those communities passively accepted the companies’ numbers before forwarding the information to two state agencies that help the districts obtain reimbursement.

Between 2001 and 2012, school districts agreed to give out $2.4 billion in reduced appraisals and tax credits to companies in the program, according to state Comptroller Susan Combs. The Texas Education Agency offsets the districts’ losses by increasing their school aid.

A goal of the program is to attract businesses to Texas. The state has high property taxes on industrial businesses and can’t compete for large relocations or expansions without incentives, said Dale Craymer of the Texas Taxpayers and Research Association.

Dick Lavine, a fiscal expert at the Center for Public Policy Priorities, said the audit shows the program is too loose about making sure as many jobs as possible are being generated.

“The reason it’s important to verify the numbers is to see if the state’s getting its money’s worth,” Lavine said.

The audit results were first reported by The Dallas Morning News.

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