Austin (TX) Voters to Decide Fate of City’s Retail Tax Breaks

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Officials in Austin, Texas have announced that residents will vote in November on a proposed amendment to the city’s charter that would ban tax breaks to retailers. The announcement came after a group called Stop Domain Subsidies (SDS) succeeded in collecting enough petitions to put the measure on the ballot.

SDS, a group of about 450 locally-owned businesses, believes retail subsidies unfairly benefit large national chains. The group was formed in 2003 to oppose an estimated $16.5 million in property and sales tax rebate awarded to a luxury shopping center called The Domain.

Under pressure from SDS, the Austin City Council approved a resolution in December that sought to bar economic development subsidies for future retail projects. However, the resolution, which is not legally binding, does not go far enough for retail subsidy ban advocates. If approved, the amendment would not only ban city subsidies to new projects with retail components, but also stop the city from making payments to existing projects, like Domain.

The Domain is owned by Simon Property Group, the largest owner and operator of shopping centers in the United States and a frequent recipient of large subsidy deals. Good Jobs First knows of two retail projects for which Simon has received over $100 million per deal in taxpayer funding – the Mall of America in Bloomington, Minn. and Circle Centre mall in Indianapolis.

Austin would not be the first city with a ban on retail subsidies. Last summer, Arizona Gov. Janet Napolitano signed into law a ban on cities in the Phoenix area from providing retail subsidies. This law came after two metro area projects were awarded a whopping $340 million in sales tax rebates.

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