According to the Legislative Budget Board (LBB), HB 4811 is not expected to have a significant fiscal impact on the State of Texas. The analysis assumes that any administrative or programmatic costs incurred as a result of adding South by Southwest (SXSW) to the list of eligible events under the Major Events Reimbursement Program (MERP) could be absorbed using existing state resources and infrastructure.

The bill does not authorize new appropriations or create a dedicated funding stream for SXSW specifically. Rather, it would make the event eligible to apply for reimbursements from MERP funds, which are drawn from incremental increases in state and local tax revenues generated as a result of hosting major events. Because these funds are only disbursed after qualifying revenues are collected, the fiscal note assumes the net impact on the state budget will be minimal.

At the local level, the LBB also anticipates no significant fiscal implications to municipalities or other units of local government. Local governments retain discretion over whether to support a MERP application, typically in coordination with event organizers. Thus, while the bill could affect local spending patterns and funding strategies around SXSW, any such impact is expected to be manageable within current resource frameworks.

HB 4811 proposes to expand the scope of the Major Events Reimbursement Program (MERP) by including the South by Southwest (SXSW) Conference and Festivals as an eligible event. It also exempts SXSW from the existing statutory requirement that eligible events undergo a competitive site selection process. While the bill is framed as a response to logistical challenges caused by the temporary unavailability of the Austin Convention Center, the broader implications of this legislation raise substantial and legitimate concerns related to the purpose, fairness, and fiscal prudence of MERP.

The most immediate concern is that the bill undermines the original intent of MERP. The program was designed to attract high-impact, geographically mobile events that would not otherwise take place in Texas without financial incentives. SXSW, by contrast, is a firmly rooted annual event in Austin with no history or credible threat of relocation. By granting an exemption to SXSW from the competitive site selection requirement, the bill opens the door to further erosion of program standards and invites similar claims from other recurring, location-fixed events seeking public funds.

Equally concerning is the expansion of public subsidies for private, for-profit enterprises. SXSW is a globally recognized brand that generated over $217 million in economic impact in 2024 alone, including nearly $10 million in sales tax revenue. Its organizers are not financially fragile or lacking in corporate sponsorship. Directing taxpayer resources—however indirectly—toward such an entity risks creating a form of corporate welfare that distorts market competition and undermines entrepreneurial fairness. This raises questions about why some businesses are deemed worthy of public support while others, particularly small or emerging events, are left to survive purely on market terms.

From a fiscal standpoint, even though the Legislative Budget Board projects no significant cost to the state or local governments, the broader financial implications remain troubling. MERP’s structure draws reimbursements from tax revenue that might otherwise be used for public priorities like infrastructure, education, or emergency services. The inclusion of a high-profile, established event into this mechanism extends state liabilities and diverts funds from their most essential uses. Furthermore, expanding eligibility without tightening oversight risks accelerating the growth of MERP into an unsustainable and politically vulnerable program.

Lastly, the bill invites regional and political imbalance. It effectively extends a handout to one city and one organization, setting a precedent that could lead to further politicization of public funding decisions. Lawmakers from other regions may reasonably object to what appears to be preferential treatment, further straining legislative consensus on economic development policy.

For these reasons, Texas Policy Research recommends that lawmakers vote NO on HB 4811.

• Individual Liberty: The bill does not directly restrict or expand personal freedoms, nor does it affect an individual’s rights to speech, association, or movement. Since the Major Events Reimbursement Program (MERP) operates primarily as a fiscal mechanism between the state and event organizers, individual liberty is not significantly implicated. The bill’s impact on this principle is therefore considered neutral.
• Personal Responsibility: The bill erodes the principle of personal responsibility by transferring financial risk from private entities to the public sector. SXSW, a globally recognized private organization, would gain access to taxpayer-funded subsidies for operational costs—subsidies that shield it from the natural consequences of logistical or financial setbacks (like the temporary closure of the Austin Convention Center). Rather than adapting their business model, SXSW’s organizers are incentivized to rely on state support, weakening accountability and diminishing incentives for prudent private planning.
• Free Enterprise: The bill undermines free enterprise by creating an unequal playing field. While SXSW receives special access to taxpayer resources, other cultural and business events—many of them smaller, newer, or less politically connected—are excluded from such subsidies. This kind of preferential treatment distorts market competition and privileges one private actor over others, violating the core tenet of voluntary, undistorted exchange. Both the Libertarian Party of Texas and the Republican Party of Texas platforms oppose taxpayer subsidies that favor specific private enterprises, citing free market integrity as a cornerstone of economic policy.
• Private Property Rights: The bill does not affect land use, ownership rights, or the ability to control private property. There is no eminent domain use, zoning change, or regulatory interference with property owners' autonomy. Thus, the bill has no direct impact, positive or negative, on private property rights.
• Limited Government: By expanding MERP’s scope to include a non-mobile, recurring event—and by exempting it from the requirement of a competitive site selection process—the bill increases the size and discretion of government. It authorizes the state to intervene more broadly in private economic decisions, using public funds to support select private ventures without transparent or competitive justification. This undermines the ideal of a restrained, focused government limited to essential public functions. Instead of reducing the state’s footprint, the bill entrenches a model where private businesses are encouraged to seek public reimbursement for operating expenses.