Annova LNG’s Tax Break Application Calls into Question Their Job Promises

August 31, 2015 by valleygreenspace

From Annova’s Appraise Value Limitation Application

FOR IMMEDIATE RELEASE

August 31, 2015

Contact: Jim Chapman,jchapmanrgv@gmail.com (956) 571-0545

BROWNSVILLE, Texas—Annova LNG has publicly claimed that the liquefied natural gas export terminal that it has proposed for the Brownsville Ship Channel will bring scores of high-paying jobs to an economically depressed region. But in documents that Annova filed with the state of Texas in an attempt to dramatically slash the taxes it will pay on its facilities, they paint a very different picture.

Over the summer Annova submitted an application for an Appraised Value Limitation under Chapter 313 of the Texas Economic Development Act, which would artificially cap the taxable value of their facility far below its actual value, significantly reducing the taxes that they will pay each year.[1] This is a state incentive program that is meant to “create new, high-paying jobs in this state” by luring companies that might otherwise go to another state.[2] (see excerpt from application attached)

In Annova’s application, their response to the question “What is the number of new qualifying jobs you are committing to create?”:

Ten.

The annual wage that they commit to pay those 10 employees? $36,197.72.

On the application Annova also commits to create 80 “non-qualifying” jobs. A non-qualifying job could be a contractor or vendor, or less than full-time, or a position paying less than qualifying jobs, but Annova does not provide any information about them.

Ten jobs, or even 90 jobs if you include non-qualifying jobs, fall far short of the number Annova has been promising as they try to win support from politicians, chambers of commerce and EDCs. And the salary they list on the application is half that of what they have been publicizing.

In fact, the very same month that Annova submitted its application for a tax break Annova’s president, David Chung, wrote in the Monitor that “once operational, the terminal would employ up to 165 workers at a base wage of $70,000.”[3]

“Annova tells us that this will be an employment bonanza when they need public support, but when they have to commit in writing, the number of promised new jobs drops to less than a Whataburger franchise,” says Stefanie Herweck of Save RGV from LNG, a broad coalition opposed to the projects. “The RGV needs real, sustainable jobs, not Annova’s smoke and mirrors.”

Under the Appraised Value Limitation and Tax Credit program Annova hopes to cap the taxable value of its $2.9 billion facility at $25 million, or less than 1% of the amount invested. Annova’s application packet includes a report on the benefits that they claim they will bring to the state, including, they say, $34,389,000 per year in state and local taxes. But in a footnote they admit that that figure does not take into account this massive reduction in the taxable value of their facility.

“The tax revenue that the Port Isabel School District loses out on from Annova will be paid instead through the Texas School Fund, meaning by all the taxpayers of Texas. Some call it an incentive, but it is really a shameless give-away of taxpayer dollars to a huge company that can well afford to pay its full taxes, just like the rest of us do. Why should we subsidize an industrial facility that will endanger our communities, pollute our air, and undermine our tourism economy?” asks Jim Chapman, Chair of the Lower Rio Grande Valley Sierra Club.

“Annova and the other LNG export terminals will be a huge blight, ruining the clear skies and natural beauty that are the drivers of our existing economy. Whether they create 10 jobs or 165, whether they pay their taxes or not, LNG is not worth the cost,” Save RGV from LNG’s Herweck asserted. “And if we cannot trust these companies to be honest, we would be fools to hitch the future of our communities, our children’s health and the world that they will grow up in, to their promises.”

The job numbers revelations come as the group Save RGV from LNG, a coalition of groups and individuals opposed the LNG complex, hosts a community meeting in McAllen today, Monday, August 31 at 6:00 pm at the Historic Cine El Rey Theatre, and as the Laguna Vista and South Padre Island city governments consider resolutions to oppose the LNG export terminal projects on Tuesday and Wednesday respectively.

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Save RGV from LNG is a coalition of Rio Grande Valley residents who have come together to oppose the construction of liquefied natural gas export terminals near Port Isabel and South Padre Island. For more information please visitwww.savergvfromlng.com

The Lower Rio Grande Valley Sierra Club works to preserve human health and the environment in south Texas from Laredo to South Padre Island. Please visitwww.valleygreenspace.blogspot.com

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[1] Annova’s application can be viewed athttp://www.texasahead.org/tax_programs/chapter313/applicants/

[2] Chapter 313 of the Texas state tax code:http://www.statutes.legis.state.tx.us/Docs/TX/htm/TX.313.htm

[3] David Chung. “Explaining LNG projects in Brownsville Port.“ The Monitor. June 24, 2015. http://www.themonitor.com/opinion/commentary-explaining-lng-projects-in-brownsville-port/article_9b48594c-193f-11e5-8be6-fb71c3391c36.html