According to the Legislative Budget Board (LBB), the fiscal implications of HB 4926 indicate that there is no anticipated fiscal impact to the State of Texas. This is because the bill deals solely with local hotel occupancy taxes that would be levied by qualifying counties and does not alter state tax rates, state-collected revenues, or state expenditures.

However, the bill does have potential fiscal impacts at the local government level. It authorizes the commissioners court of a qualifying county, defined as having a population under 100,000, bordering the Navasota River, and hosting an annual Renaissance festival, to impose a hotel occupancy tax. The revenue from this tax may be used to fund civic centers, tourism promotion, and historic preservation. This local revenue generation could positively affect the budgets of eligible counties, enabling them to invest in tourism infrastructure or promotional efforts intended to boost local economic activity and lodging demand.

Although the LBB does not quantify the specific revenue gains for local governments, the bill effectively gives them a new revenue tool, which could be particularly meaningful for small or rural counties with limited tax bases. The actual fiscal impact would depend on the number of hotels in the county, occupancy rates, and the willingness of county governments to adopt the tax and allocate funds effectively.

HB 4926 proposes to authorize certain counties, targeting places like Grimes County, to impose a county-level hotel occupancy tax (HOT) of up to 7% to fund tourism-related infrastructure, marketing, and historical preservation. While the bill is procedurally in line with how local HOT authority is typically granted in Texas, the policy it advances is fundamentally flawed. The mechanism of hotel occupancy taxation itself, regardless of the local context or use of proceeds, conflicts with core liberty principles and sound tax policy.

The primary and overriding objection to this bill is not in the details, but in its reliance on the HOT as a method of public finance. The hotel occupancy tax is a selective, regressive, and unaccountable tax that imposes financial burdens on travelers, consumers, and hospitality businesses without clear or consistent consent from those who pay it. It is often politically expedient because it targets out-of-towners, but this fact makes it no less objectionable: it represents taxation without representation, levied on individuals who have no vote and often no awareness of the local policies affecting their bill. As such, the HOT embodies the worst tendencies of government finance—pushing cost onto others, fragmenting tax accountability, and funding expansive spending agendas under the guise of economic development.

Furthermore, HOT revenues are often directed toward non-essential government activities—tourism marketing, civic centers, rodeo arenas—rather than core services. These are functions better served by the private sector or voluntary civic institutions. By using a public tax to underwrite commercial or promotional activities, the HOT distorts local economic incentives and encourages mission creep in local government spending.

HB 4926 is also part of a larger pattern: the incremental, jurisdiction-by-jurisdiction expansion of the HOT across Texas, often through narrowly bracketed legislation. Though this bill’s mechanism is common practice, it contributes to an unsustainable patchwork of layered taxes—state, city, and now county—stacking effective lodging tax rates well above 15% in many areas. This creeping tax expansion, often invisible to the public and imposed without voter approval, creates a cumulative economic drag and undermines public trust.

In conclusion, regardless of the bill’s intent to boost a local economy or invest in tourism infrastructure, HB 4926 should be rejected on principle. The hotel occupancy tax is an inappropriate and unjust tool for revenue generation. As such, Texas Policy Research recommends that lawmakers vote NO on HB 4926.

• Individual Liberty: The hotel occupancy tax imposes a financial burden on individuals, especially travelers, without their representation or consent. While not a direct restriction on civil rights, it is a form of indirect coercion: visitors are compelled to fund local government projects (like arenas and tourism marketing) that they neither use nor vote on. The bill exacerbates this by removing a nonprofit exemption that would have protected civil society organizations from taxation. It reflects a growing trend of governments shifting the tax burden onto politically voiceless groups, undermining the principle that individuals should not be taxed without meaningful input.
• Personal Responsibility: By creating a government revenue mechanism to fund promotional and development efforts, the bill reduces incentives for local stakeholders to invest their own resources or take ownership of community assets. Rather than encouraging civic engagement, business partnerships, or philanthropic support for local tourism or cultural preservation, it substitutes a top-down model funded by compelled taxes on consumers, many of whom have no local ties. The result is a shift away from voluntary stewardship and toward government dependency.
• Free Enterprise: Hotel occupancy taxes distort the hospitality and tourism market by artificially inflating prices. This puts small, locally owned lodging businesses at a disadvantage compared to operators in nearby counties without the tax. The bill also allows counties to use tax revenues to compete with private venues (e.g., by building civic centers or arenas), creating an unfair playing field where public entities, using tax subsidies, can undercut private competitors. Free markets depend on fair competition, and this kind of tax-fueled development tilts the field toward government-favored projects.
• Private Property Rights: Though the bill doesn’t directly affect land ownership or usage rights, the establishment of a tax that can fund permanent government-owned venues and expansionary tourism projects does entrench public-sector control over property and economic activity. Over time, as these tax-funded assets grow, they can increase pressure for surrounding land use restrictions, zoning changes, or future assessments. The more revenue a government collects from tourism, the more likely it is to regulate and reshape the local economy to sustain that revenue stream.
• Limited Government: The bill expands local government’s power to tax and spend on non-essential, discretionary projects. This includes civic center construction, advertising campaigns, and historical preservation efforts—activities that fall well outside the core functions of government. It provides counties with a dedicated revenue stream that can insulate them from fiscal restraint and diminish accountability. In doing so, the bill feeds the growth of government into areas that could and should be driven by private initiative or voluntary community investment.