According to the Legislative Budget Board (LBB), SB 1087 is not expected to have any fiscal implications for the State of Texas. The bill authorizes, but does not require, the commissioners court of a specific county—identified by its geographic location at the confluence of the Llano River and the James River—to impose a county-level hotel occupancy tax. As this is an optional local tax, the state budget remains unaffected under both implementation and non-implementation scenarios.

At the local level, however, the bill creates the potential for increased revenue should the county choose to adopt the tax. The fiscal impact on the local government would be positive but dependent on several variables, including the county’s decision to levy the tax, the applicable tax rate (as permitted under Chapter 352 of the Tax Code), and the volume of taxable hotel activity in unincorporated areas. This revenue could support local infrastructure or tourism development, assuming the county allocates the funds in accordance with existing statutory limitations.

No cost or administrative burden is projected for either the state or local governments beyond the county-level implementation. Because the bill merely provides enabling authority and does not establish any mandates or unfunded requirements, it is considered to have a neutral baseline impact with optional fiscal benefits for the local jurisdiction.

SB 1087 proposes to authorize the commissioners court of Mason County to impose a hotel occupancy tax (HOT) on short-term lodging within the county’s unincorporated areas. While the bill exempts hotels located within municipalities that already impose a municipal HOT tax, it would still extend new local taxing authority in a manner that raises several policy concerns rooted in principles of limited government, free enterprise, and fiscal restraint.

First and foremost, this bill represents an expansion of local taxing power. While it is framed as permissive—meaning the county “may” impose the tax—it nonetheless grants a new authority that did not previously exist. The Texas Constitution limits the taxing powers of counties unless explicitly authorized by statute, and this bill carves out a unique exception for a single jurisdiction. The practice of enabling new revenue streams through bracket bills undermines a uniform and principled approach to tax policy and contributes to the piecemeal growth of government.

Second, the hotel occupancy tax is widely recognized as a regressive and non-transparent tax. Though often justified as a charge levied on tourists, it is ultimately borne by individuals, many of whom are Texans themselves, who may travel for work, family, or other essential reasons. The tax increases the cost of lodging in rural areas and disproportionately affects small businesses that lack the economies of scale to absorb or pass on the cost. In an era where rural economic resilience is a policy priority, authorizing a tax that burdens those very communities is counterproductive.

Third, the bill lacks meaningful fiscal safeguards. It does not require that revenue raised from the tax be used exclusively for tourism promotion, infrastructure, or economic development. There are no stipulations for public reporting, sunset review, or voter ratification. Without such guardrails, the revenue generated could be diverted to general-purpose county expenditures, entrenching government growth without corresponding public accountability.

Finally, while the bill’s narrow geographic application might appear modest in scope, the precedent it sets is significant. Granting county-by-county taxing authority through legislative carve-outs encourages other counties to seek similar powers, contributing to incremental tax creep. This trend, if left unchecked, could lead to a patchwork of local tax regimes that complicate statewide efforts at tax simplification and restraint.

In summary, although SB 1087 may be intended to promote local tourism and provide flexible revenue options, it does so in a way that contradicts the broader goals of tax reform, transparency, and government accountability. It expands local government authority without corresponding oversight, imposes burdens on small businesses and consumers, and risks setting an undesirable precedent. For these reasons, Texas Policy Research recommends that lawmakers vote NO on SB 1087.

• Individual Liberty: While the bill does not directly regulate or restrict individual behavior, it authorizes a new tax on lodging, which indirectly burdens individuals exercising their freedom to travel. For Texans who stay in rural lodging—whether for leisure, work, or family reasons—this represents an additional, non-optional cost imposed without their consent or representation. Because individual liberty includes the right to freely move, consume, and transact without undue government interference or financial penalty, even indirect taxation like a hotel occupancy tax can erode this principle.
• Personal Responsibility: The bill neither promotes nor discourages personal responsibility. It does not tie tax revenue to behavior-modifying programs or incentives that would encourage individuals to take greater ownership of their actions or decisions. However, it does allow a county government to avoid hard budgeting decisions by creating a new revenue stream, potentially disincentivizing fiscal responsibility at the local level.
• Free Enterprise: The bill negatively impacts free enterprise by increasing the tax burden on lodging businesses in unincorporated areas of Mason County. Small, independent hotels, motels, and cabins may be disproportionately affected, especially in rural economies where tourism is seasonal and highly sensitive to price. This tax could reduce competitiveness or profitability, particularly for operators competing with short-term rentals that may not be captured under local tax enforcement. The bill risks creating an uneven playing field, where government-empowered taxation disrupts otherwise voluntary market dynamics.
• Private Property Rights: The bill does not modify zoning laws, impose regulatory restrictions on the use of property, or change ownership rights. However, by making the use of one’s property (specifically, for short-term rental or lodging purposes) more expensive through taxation, it could be seen as a marginal intrusion on the value derived from private property, especially for those who rely on hospitality for income.
• Limited Government: This is where the bill most clearly conflicts with liberty principles. The bill expands the scope of local government by granting new taxing authority to a specific county. It does so without requiring voter approval, imposing usage restrictions, or including transparency measures such as public reporting or sunset provisions. This unchecked expansion of local fiscal power, even in a narrow form, contradicts the principle of a restrained, constitutionally limited government. When viewed as part of a broader trend of bracketed tax legislation, it erodes structural efforts to simplify or constrain government growth.

• HB 3179 (Same As)