Original Finding
The Tax Base Threat Nobody’s Talking About
Public Facility Corporations grant 75-year property tax exemptions to developers — without voter approval, without school district notification, and without compensation.
What Are Public Facility Corporations?
PFCs are not a public investment tool — they are a tax exemption mechanism that removes property from the tax rolls for up to 75 years. Developers receive full property tax exemptions on multifamily projects by partnering with housing authorities. The cost is borne by every other taxpayer in the jurisdiction, including school districts that receive no notification, no approval authority, and no compensation. PFCs are the counter-instrument: they erode the fiscal foundation that GO bonds depend on.
- 75-year property tax exemptions for developers
- No voter approval required
- School districts have no notification or veto right
- $7.1B in statewide school district value lost (2023)
The $701 Million Disappearing Act
While Dallas ISD asks voters to authorize $6.2 billion in school bonds, the Dallas City Council is simultaneously approving 75-year property tax exemptions that permanently remove taxable value from the I&S base that will service that bond. The school district has no notification right. No approval role. No compensation mechanism.
Statewide Erosion TimelineState Comptroller
School district property value lost to PFC exemptions, in billions.
| 2019 | 2020 | 2021 | 2022 | 2023 |
|---|---|---|---|---|
| $0.9B | $1.4B | $2B | $3.7B | $7.1B |
Growth since 2019: +666%
DFW PFC Impact by County
The combined annual tax base loss across Dallas and Tarrant counties totals $701.1M — revenue that would otherwise fund schools, fire stations, and infrastructure bonds.
How PFCs Affect Bond Elections
GO bonds are repaid through property taxes levied on the jurisdiction’s taxable value. When PFCs remove properties from tax rolls for 75 years, the remaining taxpayers bear a larger share of debt service. This creates an invisible transfer: voters authorize bonds expecting shared cost, while PFC exemptions concentrate that cost on fewer households.
For Dallas ISD’s $6.2B bond, every dollar of taxable value removed by PFCs means the remaining tax base must generate more revenue per dollar to service the same debt. The school district has no notification right, no approval role, and no compensation mechanism.
“Nobody in this room will still be alive when this expires. We'll be giving up millions of dollars of revenue... it's effectively a tax increase to all our other taxpayers.”
How to Monitor PFC Activity in Your Jurisdiction
Check Your County Appraisal District
County appraisal districts maintain records of tax-exempt properties, including PFC projects. Search for properties with tax exemption codes related to public facility corporations.
Attend City Council Meetings
PFC agreements are approved by city councils, often on consent agendas. Watch for agenda items referencing “public facility corporation,” “Chapter 303,” or “tax exemption agreements.”
Track State Filings
PFC bonds appear in state databases. The Texas Comptroller and Bond Review Board track outstanding debt and exemption data that can reveal PFC activity trends.
Ask Questions at Bond Hearings
When your jurisdiction proposes new bonds, ask how PFC exemptions affect the tax base used to calculate debt service. This is a legitimate question that bond officials should be prepared to answer.
Frequently Asked Questions
Can voters block a PFC from being created?
No. PFCs are created by city council resolution under Texas Local Government Code Chapter 303. There is no voter approval requirement, no public hearing mandate, and no notification to affected school districts.
How long do PFC tax exemptions last?
Up to 75 years. During this period, the property generates no property tax revenue for any taxing jurisdiction — including school districts, cities, and counties.
What can residents do about PFCs?
Advocate for transparency: ask your city council to publish all PFC agreements, require impact assessments before approving new PFCs, and support state-level reform requiring voter notification and sunset provisions for PFC exemptions.
Do PFCs actually produce affordable housing?
Some PFC-funded developments include income-restricted units, but the affordability requirements vary widely and enforcement is minimal. Research suggests the tax revenue foregone often exceeds the affordable housing benefit produced.