Taxes

A Texas county can borrow millions of dollars on one vote of commissioners court, without an election, without publishing anything beforehand, and without giving residents any way to force the question onto a ballot. The instrument that makes this possible is called a tax note. Most people have never heard of one, which matters, because a tax note is how a county budget can balance on paper while the county spends more than it takes in. ...

Yes — a PILOT can exist without a tax abatement — but it’s important to understand what that really means, because it works very differently than most people assume. This explainer focuses on how PILOTs work in Texas, especially at the county level. What is a PILOT? A PILOT is a Payment In Lieu Of Taxes. It is not a tax. It is a voluntary payment a company agrees to make by contract. ...

A Reinvestment Zone is a defined geographic area created by a local government to make a property eligible for certain economic incentives, most commonly tax abatements under Texas law. A reinvestment zone does not reduce taxes by itself, but it is a required first step before a county can even consider a tax abatement. What a reinvestment zone does (in simple terms) Think of a reinvestment zone as turning a switch from “not eligible” to “eligible.” ...

A tax abatement is an agreement in which a local government — here, Leon County — agrees not to collect part of the property tax a new project would otherwise owe, usually for a term of years. The simplest way to think about it: the county is offering a discount. The property still exists. The roads it uses still need grading, the ambulance still runs, the fire department still answers the call. Only the bill changes. ...