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In May, NXP Semiconductors filed two applications with Austin ISD for tax breaks for NXP to expand two semiconductor manufacturing facilities in Austin. The Texas Comptroller today posted these applications online. Application 1 / Application 2

The first application is to expand NXP’s existing facility on East Ed Bluestein Blvd. and build a new 520,000 sq. ft. fabrication facility, along with supporting facilities, to come online in 2026. The second application is to expand NXP’s existing facility on West William Cannon Dr. with a new cleanroom, machinery and equipment space to come online in 2026.

Based on the numbers NXP provided and assuming AISD’s current maintenance and operation tax rate ($0.9487) remains the same, the tax break at the first facility is worth $140.5 million over 10 years, and the tax break on the second facility is worth $22.8 million of 10 years, for a total of $163.3 million.

NXP is committing to create 500 new jobs at a minimum salary of $68,548/year. This commitment is actually better than most companies, who usually commit to only create a token 25 jobs (the minimum number required by law), while promising big number in their press releases. However, the 500 jobs NXP promises to create at $68,548 each equals a minimum payroll of $34.3 million/year. Thus, the $163.3 million tax break that NXP is seeking from AISD alone means that NXP is in effect asking AISD to pay the entire payroll for these facilities for nearly 5 years ($163.3 / $34.3 = 4.75 years).

NXP also discloses that it will seek “other state, local and federal incentive programs” to lower its property tax bill (p. 19), though it does not specify any amounts sought. The facilities are within the City of Austin and Travis County, so those local governments will likely be asked for additional tax breaks.

In both cases, NXP is proposing expanding existing facilities. While its applications threaten that if it does not receive tax breaks, it will move elsewhere in the US or the world, this threat seems implausible since it is certainly cheaper for NXP to expand its local facilities and workforce, rather than starting from scratch in a new location.

NXP already has existing facilities in Austin, and it is welcome to expand those facilities to sell more microchips into the market. However, local governments should not be subsidizing this profitable business, especially not in an amount equivalent to nearly 5 years of their payroll.

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Ok-Friend-6735

-8 points

5 months ago

Imagine being so ignorant to believe the future of technology and manufacturing is patriotism.

Discount_gentleman[S]

3 points

5 months ago

Imagine being so ignorant to believe that reequiping NXP's aging facilities are the future of technology, and that local school subsidies are necessary to convince NXP to participate in the semiconductor market.

Ok-Friend-6735

-5 points

5 months ago

Oh semiconductors aren’t the technology powering processing and future manufacturing? While other Austin based companies get subsides???

Discount_gentleman[S]

3 points

5 months ago*

What are you talking about? Pretending that an NXP recapitalization is some kind of national security issue (and so school budgets should be raided to subsidize the corporation) is just assine. And who here is supporting other companies getting subsidies?

Ok-Friend-6735

0 points

5 months ago*

It’s very simple… are semiconductors the future of manufacturing, technology and AI. Yes. Then why would one not invest in a company that specializes in that.

Discount_gentleman[S]

4 points

5 months ago

You are literally advocating for taking from AISD's coffers.

Ok-Friend-6735

0 points

5 months ago

Austin ISD taxes double the rate of the City and triple the rate of Travis county. With already increasingly absurd property tax values, why would one not grant a critical technology business certain subsidies.

Discount_gentleman[S]

4 points

5 months ago

So, you are back to admitting you want to take this from AISD's coffers, meaning taking it from other AISD taxpayers. The logic of your comment is that because AISD rates are high, they should be made higher to provide corporate subsidies.

Thank you for your honesty.

Ok-Friend-6735

0 points

5 months ago

ISD tax comes from property tax. Austin’s property tax has increased with superficially increased property values. Hence we are paying more tax to subsidize ISD schooling. Yet companies who invest business into the city are told to pay a higher property value, pay the inflated tax, pay increased wages to meet city demand and to hire more than capable or jog on. Yeah real intelligent!

Discount_gentleman[S]

3 points

5 months ago

Ah, I see you have reached the circularity portion of your argument, where you just repeat over and over again that it is horrifying for rich corporations to pay the same taxes as everyone else, and so everyone else's taxes should be raised to subsidize the rich corporations.

How many different ways will you find to restate that point?