Oil refineries seek huge tax refunds

Posted Sept. 26, 2011, at 9:53 p.m.

PASADENA, Texas — Some of the nation’s largest oil refineries are seeking huge tax refunds that could force school districts and local governments across Texas to give back tens of millions of dollars they were counting on to pay teachers and provide other services.

The refineries want the tax breaks in exchange for buying pollution-controlling equipment. But the cost to public schools would be dear, coming only months after lawmakers slashed education spending by more than $4 billion.

If a three-member commission appointed by Gov. Rick Perry grants the refunds, nearly half the money would be taken from schools. Classrooms in cities with refineries would be hurt most.

“We were already cut at the knees as it is, but more cuts? It’s appalling,” said Patricia Gonzales, a single mother of twins at Park View Intermediate School in Pasadena, a refinery town just south of Houston.

She is president of the parent-teacher organization, which was created this past summer after budget cuts left the school without basic supplies such as pencils and paper towels.

The Texas Commission on Environmental Quality is evaluating 16 refund requests that could add up to more than $135 million, according to county tax data and application documents analyzed by The Associated Press.

What’s more, if the commission grants the requests, at least 12 other refineries that have not sought a refund also could qualify.

On Monday, about a dozen community activists handed out fliers in Pasadena as they conducted a mock bake sale offering $10,000 cookies, brownies and cupcakes to draw attention to the problem.

Gonzales lives near a miles-long stretch of refineries, where massive pipes and stacks light the night like skyscrapers do in other cities. An intense odor of burnt chemicals hangs over the town.

“There are days when we can’t go out because our children’s asthma is that bad,” she said. “And then they want money back?”

The state commission expressed some support for the refund last year, raising speculation that it is preparing to side with the industry.

Beginning in 2006, the Environmental Protection Agency began requiring refineries to remove sulfur dioxide from diesel and gasoline, and many refineries had to either upgrade existing “hydrotreater” units or purchase new, more effective equipment.

San Antonio-based Valero Energy Corp. argues that the units should qualify for a tax exemption under an amendment to the Texas Constitution that says industrial plants don’t have to pay taxes on equipment purchased to reduce on-site pollution.

Valero first asked for the refund for six of its refineries in 2007. Since then, at least four other companies have asked for the same retroactive refund.

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