According to the Legislative Budget Board (LBB), SB 1444 would have no fiscal impact on the state’s General Revenue-related funds during the current biennium (fiscal years 2026–2027). However, starting in fiscal year 2029, the bill is projected to produce a negative fiscal impact on state revenue due to foregone tax collections that would instead be rebated to the City of New Braunfels. Specifically, the state would lose approximately $906,000 in FY 2029 and $942,000 in FY 2030, with similar losses expected for each of the 10 years following the opening of the qualified hotel project.

The bill's financial implications arise from allowing New Braunfels to retain a portion of the state sales and use tax, as well as the state hotel occupancy tax, generated by a qualified hotel and associated businesses (restaurants, bars, and retail establishments) tied to a hotel and convention center project. These tax revenues would typically flow into the state's General Revenue Fund but would instead be redirected to the municipality for a 10-year period following the hotel’s opening.

This incentive is designed to support New Braunfels’ plans to develop a qualifying hotel and convention center by enhancing its financial feasibility through state tax rebates. The methodology used in the estimate is based on projected revenues from similar qualified projects and anticipates a September 1, 2028, opening date for the new facility. Local government would benefit from a new revenue stream without requiring direct local taxation or appropriation, but the state will incur opportunity costs in forgone revenue.

Overall, while the bill has no immediate fiscal cost to the state, it does represent a future commitment of state resources to support local economic development through tax redirection, raising broader questions about the long-term sustainability and fairness of such state-local revenue-sharing agreements.

SB 1444 expands the list of municipalities eligible to receive rebates of state hotel occupancy and sales tax revenues to finance hotel and convention center projects. In particular, it adds New Braunfels—identified indirectly through bracketed legislative language—as a qualifying city. Under the bill, qualifying municipalities can retain state tax revenues collected from specific commercial developments for up to 10 years to service debt or obligations related to a convention center or hotel project.

While the stated intent is to support economic development and tourism infrastructure, this bill raises significant concerns regarding fiscal responsibility, market fairness, and the role of government in private enterprise. SB 1444 extends a policy model in which public tax dollars are redirected to benefit specific commercial ventures—often large hospitality or real estate developments—at the expense of broader taxpayer priorities. By rebating state-collected revenues back to select municipalities, it reduces funds available for core state services such as education, public safety, and transportation. According to the Legislative Budget Board, the bill would have a negative impact on the General Revenue Fund beginning in FY 2029, with projected losses of nearly $1 million annually.

From a policy perspective grounded in limited government and free enterprise, the bill represents an unacceptable expansion of government activity into the market. It deepens state and municipal involvement in subsidizing development projects that should be financed through private investment, not public revenue. This approach shifts risk away from developers and onto taxpayers, undermining personal responsibility and the natural discipline of the market. Moreover, by favoring specific municipalities through narrowly tailored eligibility brackets, the bill incentivizes local lobbying for carve-outs, contributing to a patchwork of tax policy that lacks transparency and fairness.

Although the bill does not impose direct regulatory burdens or raise taxes, it distorts competition by allowing taxpayer-backed projects to gain an edge over unsubsidized competitors. It sets a precedent that invites further legislative expansion of this model in future sessions, creating a cycle of government-led economic intervention that may ultimately hinder rather than help Texas’s long-term prosperity.

For these reasons, SB 1444 is inconsistent with principles of limited government, fiscal restraint, and equal treatment under the law. Texas Policy Research recommends that lawmakers vote NO on SB 1444.

• Individual Liberty: The bill does not directly infringe on civil liberties, but it indirectly compromises individual liberty by shifting control over economic resources from individuals to government entities. When the state diverts public tax revenue to subsidize private hotel and convention center developments, it empowers government to pick winners and losers in the market. This undermines the individual’s freedom to operate and compete in a system free from politically favored interference.
• Personal Responsibility: SB 1444 discourages personal responsibility by allowing municipalities to finance commercial projects with publicly rebated state taxes rather than relying on private capital or local investment. Developers and local governments are shielded from the full financial risk of these projects. If the projects underperform, taxpayers—not investors—absorb the burden, removing accountability from the parties who should bear it.
• Free Enterprise: This bill is fundamentally at odds with the principle of free enterprise. It distorts market outcomes by providing government-backed financial advantages to specific developments. Businesses outside of the favored hotel and convention center zones do not receive comparable subsidies, resulting in unequal treatment and market manipulation. This harms true competition and sets a precedent for corporate welfare under the banner of economic development.
• Private Property Rights: While the bill does not directly alter or threaten property rights, it contributes to a model of urban development that can lead to zoning changes, infrastructure pressures, or even eminent domain actions justified by “public benefit.” Over time, publicly subsidized projects often drive top-down planning decisions that affect how surrounding property can be used—potentially disadvantaging nearby landowners who receive no such benefit or support.
• Limited Government: SB 1444 expands the size and scope of government by increasing the number of municipalities eligible to use state revenue streams for local projects. It further embeds the state in public-private partnerships that require ongoing oversight, auditing, and fiscal tracking. Rather than reducing government involvement in commerce, this bill invites more of it, reinforcing a development strategy that relies on state incentives rather than local initiative and market demand.

• HB 2289 (Same As)