(The Center Square) – Another billion-dollar company is expanding operations in Texas on the taxpayer’s dime.
Formosa Plastics Corporation is investing $150 million to open a new facility in Jackson County to produce C6 (1-Hexene), a feedstock organic compound used at their existing complex in Point Comfort to produce polyethylene, the most commonly produced plastic.
It’s doing so by paying less property taxes to the local public school district after qualifying through the Texas Jobs, Energy, Technology, and Innovation (JETI) program. The program offers property tax breaks, including a “school district maintenance and operations (M&O) tax appraised value limitation of 50%, based on qualifying job and capital investment minimums.”
The company is a subsidiary of Formosa Plastics Corporation, U.S.A., a privately held company headquartered in Livingston, New Jersey. The “growing, vertically-integrated supplier of plastic resins and petrochemicals” company states its annual revenues are more than $5 billion.
Formosa Plastics Corporation paying less in property taxes was a key factor in making the decision to expand operations, Texas Business Development Vice President Jack Wu said.
“We appreciate Governor Greg Abbott’s Texas Economic Development & Tourism Office, the Texas Comptroller of Public Accounts Office, and the Palacios Independent School District (ISD) Board for approving our application,” Wu said. “Property tax is an important factor when determining a site location for expansion projects. This type of approval helps move projects forward, which will support long-term economic development in the region and benefit the community.”
Despite the school district losing tax revenue due to the JETI designation, Palacios ISD Superintendent Dr. Jared Duncum praised the expansion. “Formosa Plastics has been an important part of our community for years. We look forward to a continued relationship with this important industrial partner,” Duncum said.
Palacios ISD is located in a poorer region of the state. The majority of its students, 73%, are economically disadvantaged, according to Texas Education Agency data. Only 44% of its students are at grade level in all subjects; only 17% have mastered their grade level in all subjects, according to the data. The majority of students, 71%, are Hispanic.
Abbott emphasized the expansion will support “good-paying jobs for Texans, expand economic opportunity in Jackson County, and further our state’s manufacturing leadership.” He also points out that “Texas leads the nation in chemical production and exports. With Texas’ unmatched business operating advantages and easy access to domestic and global markets, Texas manufacturers offer an efficient, reliable supply chain for critical materials used in the production of everyday products.”
With strong domestic production capacity led by Texas, the U.S. has experienced a trade surplus in plastic resins and remains a global leader in materials manufacturing. In 2024, plastics manufacturers in Texas generated $61.5 billion worth of goods and supported 54,090 jobs across 840 facilities statewide. Texas workers earned an average of $85,680 annually in the industry, among the highest in the U.S. The sector’s total payroll last year was $4.6 billion, according to the analysis, The Center Square reported.
While the industry is undeniably a job and economic engine, it’s also come under fire for allegations and lawsuits related to pollution, environmental regulation violations and community health problems. An Environmental Integrity Project analysis published earlier this year found that 84% of plastics plants evaluated nationwide violated their air pollution control permits over the last three years.
