REUTERS / Gabriel V. Cardenas STARBASE — Since establishing a South Texas headquarters more than a decade ago, SpaceX has quickly grown its operations here, expanding its staff from 300 in 2020 to more than 3,400 in 2024. The company is growing once again, taking on two new projects that will enable SpaceX to launch rockets more frequently. Construction crews are already at work to expand SpaceX’s presence in this once little-known South Texas community. And the company has hired hundreds of workers for the next phase of fulfilling CEO Elon Musk’s goal of landing on Mars. As SpaceX moves forward, the company is seeking to benefit from doing business in one of the poorest regions in the state, the Rio Grande Valley. The new city of Starbase— created and run by employees of SpaceX — is helping the company apply for a multimillion-dollar state tax refund. SpaceX wants the refund from the state for hiring staff and spending on its operations along the U.S.-Mexico border. But the significance of the projects in advancing the company’s goals raises questions on whether SpaceX is seeking to benefit from investments it already planned and whether communities are truly benefiting from economic incentive programs. Late last year, the Starbase City Commission, the three-member governing body that consists of two SpaceX employees, nominated two SpaceX projects for the Texas Enterprise Zone Program, which provides tax relief for companies that create jobs in economically distressed areas. SpaceX has already received preliminary approval for one tax break. The governor’s office, in September, accepted SpaceX’s GigBay program application. The company began work in April 2025 on the 700,000-square-foot facility meant to produce 1,000 rockets per year. The work began within a 90-day window before the application deadline. In November, Starbase commissioners nominated a second project: the Starship Infrastructure Expansion Project, which will invest in two launchpads, allowing for an increase in launches per year. If the expansion project is also approved for the enterprise program, SpaceX would be eligible for up to $7.5 million in sales tax refunds. Though, advocates say state tax dollars could be better spent elsewhere than on SpaceX, a company valued at hundreds of billions of dollars. “Elon Musk is like the wealthiest person alive,” said Kristan Wong Karinen, a researcher with Good Jobs First, a D.C.-based nonprofit that promotes government accountability in economic development. “He’s supposedly set to be the first trillionaire, so there’s an ethical question here about — I pay my taxes … so why does Elon Musk get a pass?” Starbase and SpaceX officials declined multiple interview requests for this article. Rio Grande Valley counties are considered economically distressed The Enterprise Zone Program is meant to encourage job creation and investment from private companies in low-income zones. For companies like SpaceX that are located in a zone, at least 25% of newly created jobs must be filled by people who are economically disadvantaged or are zone residents. If a business is outside a zone, at least 35% of jobs must meet that criterion. An enterprise zone can be a low-income community or neighborhood with a 20% poverty rate. It can also be a county that is deemed economically distressed. In 2024, there were eight economically distressed counties in Texas. Four of those counties make up the Rio Grande Valley, including Cameron County, where Starbase is located. “This program is kind of targeted to areas that are kind of [high] poverty areas, trying to help out and bring jobs and opportunities to the area,” said Will Ramirez, vice president of Site Selection Group and former auditor with the Texas comptroller’s office. The two projects are each expected to create 500 new jobs. GigaBay is a $506 million investment for the company. And the expansion project represents a $480 million investment. That puts both projects in the Triple Jumbo Project designation of the Enterprise Zone Program. That designation, the highest level, requires a capital investment of at least $250 million. The application process is competitive, Ramirez said. The state program issues 105 designations every two years, and each community is limited to receiving up to six or nine enterprise project designations, depending on population. “We’re seeing the companies competing in McAllen or Brownsville … they’re going against companies in Dallas, in Houston, all around,” Ramirez said. During the application process, companies are scored on three things: the distress of the area, which makes up 40% of the final score; local effort, which is the community’s willingness to offer local incentives and which accounts for 25%; and private effort, accounting for the remaining 35%, can be based on jobs, average weekly employee wages, and projected capital investment. If approved by the state, the two projects could each result in a refund of up to $3.75 million in state sales taxes, according to the Texas Economic Development and Tourism Office. A company representative told the commission that SpaceX plans to reinvest those funds into Starbase operations and infrastructure. “The project drives ongoing work for local and regional contractors, suppliers and service providers tied to the Starship operations,” Damian Barrera, a tax manager at SpaceX, told the commission in November. But receiving those refunds is far from a guarantee, Ramirez said. “Trust me, there’s no rubber stamping on these audits,” he said. “Everything gets reviewed thoroughly. I mean, this is the state’s money so they’re very stickler about the process.” SpaceX infused $13 billion in region’s economy SpaceX has called South Texas home for more than 10 years, settling on Boca Chica Beach for its remote location and proximity to the equator. It made the area the site of 11 test flights of its rockets since 2023. Last year, SpaceX received approval from the Federal Aviation Commission to increase the number of launches from five to 25 times per year. For its continued growth, including the production of the new generation of Starship vehicles, SpaceX already hired 500 new, full-time employees for the GigaBay project from April through mid-September 2025. Nearly 100% of those employees are Cameron County residents, Barrera told the commission. Because SpaceX has been present in South Texas for several years and could reasonably have been expected to undertake the projects regardless of the tax incentives, Kasia Tarczynska, a senior research analyst with Good Jobs First, found SpaceX’s eligibility for the tax refund to be dubious. “By already having this company within that town, and then retroactively giving it subsidies, it doesn’t meet the definition of an incentive,” she said. The SpaceX Starship on its launchpad in the distance beyond South Padre Island on Aug. 24, 2025. Credit: