Judge Todd Little explains County Tax Abatement

ELLIS COUNTY – Last week’s tax abatement notice for 288 acres in Red Oak spurred a longer story on the topic after sitting down with Ellis County Judge Todd Little.

Little said regarding abatements, last year when negotiating the Compass Data Center, the county decided to take its threshold of 10 years down to seven years.

“That is 30% less time and we believe that seven years is a sweet spot of a break-even point of when we need to receive the funds.”

A tax abatement with a company begins when they begin to improve the land.

“If we give them 75% abatement, which means they are going to pay 25% of the tax for seven years unless they get to $300 million added-value and then they can qualify for up to 85%.

“Some of these datacenters are $2.6 billion,” Little said.

As for city versus county abatements given to incoming companies, these are separate.

An example, Little said, “The city will bring the developer to my office to meet with me to get my pulse on the development. 

“The next step is to call the county commissioner in that precinct, from there we call a workshop on the project and then a posted notice. 

“Thirty days later Commissioner’s Court votes on the tax abatement.

“Our abatement works different than the cities because we believe the shorter the time period the better for the county,” Little explained.

And while some residents might not like abatements, Little said they often have no choice.

“County competition is real among adjacent counties,” he said. 

“If we can provide a little bit better than the county next door, we would win the deal and if we win the deal, it is a win for the citizens, the government, and a win for the community the project builds in.”

Little said, the county is very selective on how it uses abatements.

“We will not give abatements to solar or wind farms because they are getting federal subsidies already and we do not think that is the highest and best use for the land. 

“We will not give tax abatements for a trash facility, for a recycling plant because generally there are all types of nuisances; smell, birds, all kinds of things that come from a negative standpoint for a waste plant.

“Say we don’t want a large racetrack – we don’t want the noise so we could work with the city to defeat that project. 

“We could not give them any incentives to come and that means they have to pay market price instead of the government aiding them in building something we don’t desire. 

“If we can always unite with a common vision on a project that the city, community, and county benefit from then we would vote to support.

“There are currently around 10 to 15 projects under tax abatement in Ellis County, for example Fresh Pet in Ennis with its $850 million/600 job project.”

Little said he loves projects where they can partner with school districts.

“Whenever we can find a project that has high value and does not harm our school districts it is a win for the county and the school district,” he said. 

“An example would be a data center with 50 regular employees, but they have billions of dollars in value.

“The school benefits from the value, but there many kids that come with only 50 or 60 employees.”

Little said personally, “If tax abatements were not legal in Ellis County or any county, I would be in favor of not having tax abatements on a statewide basis. 

“Texas is going to be pro-business regardless so why are we giving money away?”