Texas county gives thumbs-up to tax breaks to lure Tesla factory

Bob Sechler, Austin American-Statesman on

Published in Business News

Tesla -- which hasn't said when it plans to make a decision on where to build the plant -- still could seek a taxpayer-funded grant for the project from the Texas Enterprise Fund, the state's deal-closing reserve that's aimed at providing the final carrot to swing a corporate decision. Neither Tesla nor the office of Gov. Greg Abbott have responded to questions about a possible enterprise fund grant.

The company also has been considering Tulsa, Okla., as a location for the factory, although it previously indicated that the site it's considering in the Austin area is the front-runner. The Austin site being considered is a 2,100-acre tract at Texas 130 and Harold Green Road in southeastern Travis County.

Local proponents of the Tesla project who spoke at Tuesday's meeting prior to the vote called it a potential boon for the economy and fountain of new jobs well worth the price of taxpayer subsidies.

"I think it would be a huge opportunity for a wide range of people and businesses in the Austin area," particularly amid the ongoing downturn triggered by the coronavirus pandemic, said David Stewart, chairman of the Austin Regional Manufacturers Association. "I want this opportunity for our city, and I hope you make this investment in our city."

But others criticized Tesla's corporate record on workplace safety and labor relations and pushed for more to be done to ensure potential future employees of the factory are treated and paid well.

They also urged commissioners to delay the vote for a week so that members of the public have additional time to review the deal, which has undergone revisions over the past few days as officials worked to address concerns about it.


"I guarantee you Tesla wants to come here," so the agreement shouldn't be rushed at the expense of ensuring it's as well-negotiated as possible, said Jeremy Hendricks, a representative of the Southwest Laborers' District Council.

If Tesla ends up building the factory, the Travis County incentive deal approved Tuesday calls for it to pay a minimum wage of $15 an hour to employees -- including contract employees who regularly work at the factory -- with an escalator based on consumer prices, in addition to health insurance, paid leave and other benefits.

Tesla previously has said the average annual salary would be $47,147, while the median annual salary would be $68,303.

But Nathan Jensen, a University of Texas government professor who studies taxpayer-funded incentives to corporations and is a critic of them, called Tesla's mandated minimum wage of $15 an hour -- which equates to $31,200 annually for a full-time worker -- an extremely low bar for a manufacturing company to clear.


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