In Texas, a business' inventory sitting in a warehouse or plant can be taxed by cities, counties and school districts. In 1989, the state began allowing tax exemptions on inventory shipped out of state within 175 days of manufacture. The state does not reimburse school districts for the loss in funding the first year districts exempt the taxes. The loss in taxable property revenues is not calculated in school districts' funding until the following year. Trustee Dot Snyder said Casey on Wednesday lessened her concerns that the district might lose even more money in the future if the exemption is granted because of changes in state funding.
State law prohibits a taxing entity from retracting the exemption once it is approved.
Chamber officials have encouraged local taxing entities to approve the matter to give industry recruiters greater leverage when trying to draw businesses to the area. Jack Stewart, chamber president, said chamber officials' primary concern when soliciting the district's support of the exemption was to ensure schools wouldn't be harmed financially. By getting businesses to agree to pay the taxes the first year, Stewart said the exemption shouldn't hurt Waco's public education system. In December 2000, McLennan County commissioners approved the freeport exemption. According to Casey, some 93 school districts in Texas offer the exemption and more are considering the issue.