In May, Elon Musk gave $500,000 to Republican Gov. Greg Abbott's reelection campaign. Within about three months, Abbott had signed off on $1.66 billion in school tax breaks for Musk's Terafab chip plant. That one deal is more than half of everything the program has ever handed out. Now Abbott wants a fourth term.
The $500,000 Check
Musk's $500,000 donation hit Abbott's campaign in May. He sent the same amount to Republican Lt. Gov. Dan Patrick.
Texas has no limit on individual donations in most statewide races. So a trillionaire can drop a six-figure check on the governor, and it's perfectly legal.
And that's pocket change for Musk. He has sent more than $276 million to Republican groups and his own super PAC since July, according to New York Times figures.
Then Came the Tax Breaks
Terafab is a massive chip factory SpaceX plans to build in rural Grimes County, with xAI and Tesla. In July, two local school districts approved $1.66 billion in property tax breaks for it on 5-2 votes. Under state law, the deal also needed Abbott's approval.
He gave it. By July 21, Abbott had submitted his approval to the state comptroller, while his office ignored repeated requests for comment. The final agreements were signed on August 21, about three months after Musk's check.
On top of that, Abbott's office handed SpaceX a $30 million Texas Enterprise Fund grant. That's a pot of money the governor controls himself.
Half the Program, One Man
The Republican Legislature created the JETI tax break program in 2023 to lure big industrial projects. It replaced an older program that was phased out after complaints that it hurt public schools.
Musk's Terafab deal alone is more than half of the $2.2 billion JETI has awarded since. One man's company is getting more than every other project combined.
And these are school tax breaks. The state pays the districts back for the lost revenue. That means Texas taxpayers cover the bill.
$1.66 Billion for 80 Jobs
SpaceX says it could invest up to $119 billion. But to keep the breaks, Terafab only has to create just 80 jobs. That's more than $20 million in tax breaks for every required job.
SpaceX played hardball to get the deal. A company rep told a school hearing that without the breaks, "we're actively looking at locations in other states" like Arizona.
Local parents pushed back. One mom asked the board how it could let Musk's company skip paying while the plant floods the rural district with new students.
This relationship goes back years. Abbott has told the story of Musk calling him during a Valentine's Day dinner with his wife, the night before SpaceX filed to leave Delaware for Texas. Musk wanted to know if Abbott would "have his back." Abbott says he told him 100 percent.
Abbott then pushed a brand new business court system into existence, with judges he appoints. Musk has since moved Tesla, X, and the rest of his companies to Texas.
What Abbott Says
Abbott's campaign has said its donations are publicly disclosed and legal under Texas law. His office says Musk has invested more than $11.6 billion in Texas and is set to create over 22,000 jobs.
There's no evidence the donation was tied to the deal, and no one has been accused of breaking the law. But the timing is hard to ignore.
The Choice in November
Democrat Gina Hinojosa, Abbott's opponent, says she would end corporate welfare and put that money toward lowering property taxes. She also wants to review Musk's incentives to make sure he's actually delivering the jobs.
Musk seems to have noticed. Canvassers for his America PAC in Texas are reportedly being told to target Hinojosa at the door.
Musk wrote Abbott a $500,000 check. Abbott signed off on $1.66 billion in breaks, paid for with Texas school tax money, for a plant that only has to create 80 jobs. That's the Republican deal in Texas: the trillionaire gets the tax break, and you get the bill. Election Day is November 3.
Sources: Houston Chronicle (Benjamin Wermund); Austin American-Statesman; KBTX; Houston Business Journal via KHOU; E&E News by POLITICO (Mike Lee); Office of the Texas Governor.