According to the Legislative Budget Board (LBB), SB 1553 is not expected to have any fiscal implications for the State of Texas. This means that the bill, as introduced, would not affect state revenues or expenditures directly. The bill’s provisions concern only the authority of certain counties—specifically those where the headwaters of the Guadalupe River are located—to impose a local hotel occupancy tax, which falls outside the scope of state-level fiscal responsibilities.

At the local level, however, the bill introduces a new taxing authority for eligible counties, which would likely result in an increase in county revenues. The tax would be levied on hotel occupants, providing a new stream of funding for the county’s general operations or specific tourism-related purposes, depending on how the commissioners court chooses to allocate the funds. The actual fiscal impact would vary based on the volume of hotel activity in the county and the rate imposed.

While the fiscal note does not estimate the exact amount of revenue gain for local governments, the implication is that the bill enables a potentially significant financial tool for counties with substantial tourism or lodging activity, like Kerr County. The revenue could be used to support local infrastructure, tourism promotion, or other county services, reducing reliance on other local tax sources such as property taxes. However, these benefits must be weighed against possible economic effects on lodging competitiveness and consumer costs.

SB 1553 proposes granting certain counties, specifically those encompassing the headwaters of the Guadalupe River, such as Kerr County, the authority to impose a county-level hotel occupancy tax (HOT). The stated aim is to raise revenue for tourism-related infrastructure improvements, notably $2.5 million in repairs needed for the Hill Country Youth Event Center. However, despite the bill’s targeted scope and well-meaning intent, it raises substantial concerns regarding taxation, government overreach, and policy precedent that justify a firm "No" vote.

First and foremost, SB 1553 expands the power of local government to impose a new tax, one that did not previously exist in unincorporated parts of the county. This undermines the principle of limited government by enabling an additional layer of taxation, one that impacts the lodging sector and those using private property for short-term rentals. While these taxes are politically framed as targeting “non-residents,” the economic reality is that they suppress competitiveness, discourage private investment, and ultimately raise prices for consumers and tourists. This represents a distortion of free market dynamics in favor of politically directed spending priorities.

The bill also sets a concerning policy precedent by carving out special taxing authority based on narrowly tailored geographic or political criteria. Though Kerr County is the immediate beneficiary, other counties may soon seek similar powers, leading to a proliferation of localized tax schemes that create a fragmented and burdensome statewide tax landscape. This trend erodes consistency and predictability in tax policy, both of which are key elements of a healthy economic environment.

Additionally, SB 1553 does not include adequate safeguards to ensure transparency, accountability, or restraint in how the newly authorized tax revenue would be used. While state law requires HOT funds to be used for tourism-related activities, such statutes are broad and loosely enforced. The bill lacks requirements for public reporting, citizen oversight, or taxpayer protections such as voter approval or sunset clauses. This raises concerns about long-term mission creep, where temporary infrastructure needs evolve into permanent taxation justified by expanding spending priorities.

Finally, for those who view hotel occupancy taxes as inherently coercive and anti-liberty, regardless of who pays them, this bill is a direct violation of foundational principles. Even if the tax targets travelers, it represents the use of government force to extract funds for specific ends, bypassing voluntary exchange and market-based solutions. In a state known for resisting tax-and-spend models, this bill moves in the wrong direction.

For all these reasons—principled opposition to tax expansion, defense of free enterprise, concern over precedent, and the absence of accountability safeguards—Texas Policy Research recommends that lawmakers vote NO on SB 1553.

• Individual Liberty: The bill authorizes a new local tax that reduces individual economic freedom. By imposing a hotel occupancy tax on lodging transactions in unincorporated areas, the bill forces consumers and property owners into a financial obligation enforced by the government. Even if marketed as a tax on “non-residents,” it limits individual choice by increasing costs and constraining how people can use their private property for lawful economic activity.
• Personal Responsibility: The bill neither promotes nor discourages individual accountability directly. It doesn’t address behavior that would encourage citizens to take ownership over their actions. However, by relying on a compulsory tax rather than voluntary contributions, community investment, or user fees, it sidesteps the opportunity to build civic responsibility through locally driven or market-based initiatives.
• Free Enterprise: The bill imposes a new regulatory burden on one sector of the local economy—hospitality and lodging—by increasing the cost of doing business. It creates a disincentive for entrepreneurs to open or expand hotels or short-term rentals in the affected areas. This reduces competitiveness, especially for small operators who are more sensitive to price changes. Taxes that apply only to certain industries distort natural market dynamics and shift economic outcomes through government intervention, undermining the principle of a free and open marketplace.
• Private Property Rights: By enabling taxation of short-term lodging, the bill affects how individuals can use their private property. Owners who rent homes or cabins to tourists will be subject to a government-imposed tax that diminishes their returns, adds compliance costs, and may subject them to new forms of regulation or enforcement. Although it doesn't outright prohibit property use, the added cost functions as a government-imposed barrier, particularly punitive to property owners outside of city limits who have previously operated free of municipal hotel taxes.
• Limited Government: Perhaps most critically, the bill represents an explicit expansion of government authority. It grants counties a new taxation power—one they did not previously have—without requiring local voter approval or including a sunset clause. This broadens the size, scope, and reach of government in everyday commerce, which runs directly counter to the ideal of restrained, constitutionally limited governance. Furthermore, it may incentivize other counties to seek similar taxing authority, leading to piecemeal growth in government power across the state.

• HB 3178 (Same As)