The Travis County Commissioners Court voted Tuesday to withhold 9% of Tesla’s tax rebate for 2020-2022 for “partial noncompliance with certain provisions” in the company’s economic incentive deal with the county.
“The big takeaway is we are holding Tesla accountable,” Travis County Commissioner Brigid Shea said at the meeting.
The deal, which was finalized in 2020, offers Tesla up to 80% off the largest portion of its county tax bill in exchange for spurring economic growth in the region.
The agreement requires Tesla to create at least 5,001 total new jobs, ensure at least half of all Gigafactory employees are Travis County residents and pay employees a living wage, among other stipulations. In 2020, the county estimated the deal would result in $14 million in savings for Tesla over the first 10 years of the agreement.
Travis County Judge Andy Brown said while Tesla fulfilled many requirements of the contract, the company did not provide sufficient documentation to show it was complying with the “Green Building Program” section of the contract, which required Tesla to build the Gigafactory in an “environmentally conscientious manner” and strive to achieve zero emission energy ratings.
Brown said the company also didn’t provide sufficient documentation to prove it followed certain construction site safety rules or paid minimum wages for contracted food and janitorial workers.
The motion to withhold 9% of Tesla’s tax rebate passed 4-0; Commissioner Margaret Gómez abstained from voting. The county is still reviewing Tesla’s annual compliance reports for 2023, 2024 and 2025.
The commissioners court signed the deal with Tesla in 2020, before Tesla and its billionaire owner Elon Musk aligned with President Trump and the conservative right.
As the company’s reputation changed, Travis County residents have scrutinized the commissioners court for maintaining the deal. Over the past year, community members have urged the court to end the contract, citing hazardous working conditions and environmental violations.
Speaking to the court during the public comment period Tuesday, resident Christina DeStefano said Tesla also hasn’t kept its promises to the Southeast Austin community. Tesla has yet to build an extension on Harold Green Road, a 2017 bond project the company agreed to take on after it interrupted the road work with the construction of the Gigafactory. DeStefano said Tesla has also not made meaningful progress on the “ecological paradise” it plans to build.
“What will likely happen is Tesla continues to build nothing while collecting tax rebates and saving face,” DeStefano said. “I do want you to consider that Tesla is not willing to uphold its end of the bargain.”
Before casting her vote, Commissioner Shea said Tesla has upheld the “key” provisions of the agreement, including providing “very good paying jobs” for people without college degrees.
“No agreement is perfect, and as a result, we are not giving them their full rebate,” Shea said. “But I think we also have to acknowledge that there are significant benefits from this company.”