Secede!!!

The city’s Economic Development & Tourism Board received two separate reports during its meeting today at the Seton Medical Center, one on building permits and the other an update on the effort to make Kyle-Buda a triple freeport area, without realizing, I think, the two items are intrinsically linked. In fact, the two items weren’t even together on the board’s agenda; they were separated by three other items although they both came under the heading of "Economic Development Updates."

On the subject of building permits, Diana Torres, the city’s director of Economic Development, said residential permits were going great, but commercial permits seemed to be stalling. After cautioning the board that apartment complexes count as commercial permits, Torres said the city is averaging four commercial permits a month, compared to five a month in 2014 (she did not provide numbers for last year).

Residential permits, however, "are way up," she said. The city averaged granting 62.83 residential permits per month., she said compared to 54.33 this time last year and 48.8 the year before that. In 2013, she said the number was 21.8, so essentially that figure has ballooned to three times its size in three years.

And yet, in the two years I have lived here, this city has not landed even one major non-retail economic development project. And one of the convincing arguments for that is because we are not a triple freeport area.

I have discussed triple freeport at length before but, in short, it is an economic development tool that exempts from taxation certain goods a company may have at its facility for less than six months. It most commonly affects businesses that assemble parts into a product that is then shipped out and allows those parts to be exempt from taxation. If this exemption is granted by an area’s three main taxing entities — the city, the county and the school district — then that area is known as a triple freeport area. Most, if not nearly all, businesses eligible for such an exemption that are looking for new locations will not even consider an area that is not designated triple freeport. Here, both the city and the country have granted the exemption; the school district, which levies the largest share of taxes in any Texas community, has not.

Subtle pressure has been applied to the Hays Consolidated School District board to grant such an exemption but so far those applying the pressure have been arguing facts, (i.e., the district will not lose any money by granting the exemption), that are irrelevant to the board. I am convinced the school board is, if not dominated by, at least influenced the strongest by no-growth advocates. Their argument is the school board’s sole interest should be education and that they were not tasked with promoting economic development so they should play no role in promoting economic development. The money argument does not counteract that.

So what to do? One could argue that a strategy could be developed to counteract the board’s point of view. But that rarely works. I have always found that, in any political battle, the side that sets the agenda wins. So one could try to argue the school district’s position is wrong, but you are simply arguing their position, not one of your own.

I am convinced that if Kyle leaders really believe a triple freeport designation will significantly alter the economic development landscape for the better, they should begin an effort immediately to secede from the Hays Consolidated School District to form a Kyle Independent School District, with its own board that has the ability to grant the exemption.

I am also convinced that even the serious threat to break away would force the Hays school board to reconsider and grant the exemption. And, if it doesn’t, the argument could be made that Kyle students would be better served by a locally controlled school district.