Schools may have to dig deeper to pay oil company tax breaks

Wednesday, September 28, 2011
Oil Companies Tax Break

For a state that’s already endured over $27 billion in budget cuts including over $4 billion in cuts to education, there may be more to come.  Three Rick Perry appointed commissioners of the Texas Commission of Environmental Quality (TCEQ) are close to approving a $135 million property tax break for some of the world’s largest oil companies even though they’ve recorded record profits yet again.  The $135 million in property tax breaks would be paid for with funds from local communities near oil refineries, money that counties have been expecting to use for teacher salaries and school funding. 

Oil companies are requesting the tax break under a law that allows companies a tax exemption for purchasing equipment that eliminates on-site pollution. The request was made by sixteen different refineries for purchases of new or updated hydrotreater units to remove sulfur dioxide from diesel and gasoline.  In 2006, the U.S. Environmental Protection Agency (EPA) began requiring refineries to remove sulfur dioxide to reduce vehicle pollution.

However, hydrotreater units do not reduce or eliminate any pollution on-site, as required to receive the tax break.  In fact, they increase local pollution.   According to the Associated Press:

The commission’s staff said the hydrotreaters reduce pollution in diesel and gas, not necessarily at the plant. In fact, staff said, the hydrotreaters actually increased sulfur dioxide pollution near the refineries because the toxic gas is now burned off in a flare.

Source: Fuel Fix

Yup, you read that right.  Oil companies are requesting a tax break, that would be paid for by reducing local funding for education, for installing a technology that increases local on-site pollution in those communities.   The law was created to encourage investment in new technology and to reduce on-site pollution, not reward companies for complying with regulations from 2006 with massive tax breaks.  

Valero, a major Perry contributor, stands to benefit most from the property tax refund, with a potential $92 billion dollar refund.  Perry has received $147,895 from Valero, more money from the company than any other politician in the country except one.  Valero first applied for the exemption in 2007 and was denied.  Now they’re appealing and asking for payments retroactive to that year.  Four other companies are following suit.  If approved, twelve other refineries will also be eligible for the same tax break.

Both Governor Perry and the three commissioners have hinted that they will support the tax break.  The fact that everybody else pays their fair share of taxes and schools are cutting everything from pencils to busing while big oil gets a tax break stinks almost as bad as the refineries themselves.  Almost.

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