Headlines: Repeat Tax Break for Landry’s; More New Homes for Katy

Photo of mascot, BRC Gastropub: Karen Dressel

4 Comment

  • Art III, Sec. 55 of the Texas Constitution prohibits State and Local government from entering into contracts to forgive deliquent taxes. Landry’s failed to hire the number of people they promised to hire and lost the tax abatement. Those taxes are now due and are deliquent. The City cannot cut a deal with Landry’s to foregive those delinquent taxes. It violates the Texas Constitution.

  • Old School: I assume your research is right about that and if so I am not surprised. Violating the Constitution (whether state or federal) seems to be something no one is concerned about anymore. Get enough money thrown around and voila, you get what you want. The tax base needs funding from somewhere and if it is not getting it from Landrys then the tax monster will ask for it elsewhere, guess where that will be from? The common people who can least afford it.

  • From – http://www.statutes.legis.state.tx.us/Docs/CN/htm/CN.3.htm – “Sec. 55. RELEASE OR EXTINGUISHMENT OF INDEBTEDNESS TO STATE, COUNTY, SUBDIVISION, OR MUNICIPAL CORPORATION. The Legislature shall have no power to release or extinguish, or to authorize the releasing or extinguishing, in whole or in part, the indebtedness, liability or obligation of any corporation or individual, to this State or to any county or defined subdivision thereof, or other municipal corporation therein, except delinquent taxes which have been due for a period of at least ten years. ”

    I read this to mean that the State Legislature cannot forgive back taxes, but that the Municipalities retain that option. Is that correct?

    Aside from that, the last thing Downtown needs is another parking lot. I hope Mr. Fertitta eventually decides to use that land for something more forward-thinking and worthy of the potential for that space.

  • It applies to State, county, muni, school dist. A municipality can only do what the legislature says it can do. The constitution prohibits the legislature from giving municipalities the authority to foregive tax debts.
    This issue is probably going to end up in the courts with the Amazon.com settlement. People claim that the State cannot foregive Amazon’s failure to collect taxes in exchange for a development agreement with Amazon. The State of Texas will probably argue that it is not really forgiveness of a debt as it is some sort of renegotiation of the debt supported by consideration. City of Houston would probably make the same argument. I think the constitution is pretty clear. Everyone has to pay their taxes no matter what. And given that the City now gives out 380 agreements like they were library cards, I am sure developers will use their new developments to get a write off of tax liens they have on other properties around town. Hasn’t happened yet. But, after this deal with Landry’s, it is just a matter of time.