According to the Legislative Budget Board (LBB), SB 2622 is expected to have no fiscal impact on General Revenue through the biennium ending August 31, 2027. However, starting in fiscal year 2031, the bill will begin to have a negative fiscal impact that will continue for at least ten years. The projected loss to the General Revenue Fund begins at $467,000 in 2031 and gradually increases to $546,000 by 2035.

The fiscal impact results from the bill's provision granting the City of Burleson eligibility to receive rebates of state hotel occupancy tax and state sales and use tax generated by a qualified hotel project, including associated restaurants, bars, and retail outlets. These rebates are permitted under Section 351.156 of the Texas Tax Code and would be available to the city for a ten-year period starting from the opening date of the hotel. The estimate assumes a project opening date of September 1, 2030, aligning the start of revenue loss with fiscal year 2031.

Importantly, the analysis confirms that while the bill’s near-term impact is neutral, its long-term effect is a measurable and continuing reduction in state revenue. The city stands to gain financially from redirected state taxes, which would otherwise flow into the state’s general revenue pool. This shift supports local economic development goals but also reflects a policy tradeoff: local gain at the expense of statewide fiscal resources. The Comptroller’s office and LBB staff note that similar rebate arrangements with other municipalities have informed the estimates, making this forecast consistent with known precedents.

SB 2622 proposes to expand the eligibility of municipalities—specifically, the City of Burleson—to receive rebates of the state’s hotel occupancy tax (HOT) and sales tax revenue associated with a qualified hotel and convention center project. Under this bill, Burleson would be authorized to retain state tax revenues generated by hotel-related activities for ten years, supporting local efforts to develop a new hotel and conference center intended to spur tourism and economic activity.

While the bill may appeal to local development interests, it raises several significant concerns that justify a recommendation of "No" on both policy and principle. First and foremost, the bill results in a measurable long-term loss to the state’s General Revenue Fund. Although it has no fiscal impact through FY 2027, the Legislative Budget Board projects annual losses beginning in FY 2031, starting at $467,000 and growing to $546,000 by FY 2035. This foregone revenue is substantial over time and represents a subsidy provided to a single municipality without broader statewide benefit.

The bill also undermines principles of limited government and free enterprise. By granting one city a targeted financial benefit based on highly specific population and geographic criteria, the legislation distorts competition and entrenches a policy pattern of privileging politically negotiated development efforts. Other cities with similar needs and circumstances are left ineligible due to arbitrary statutory thresholds. This invites a patchwork of tax favoritism that lacks transparency, fairness, or statewide uniformity.

Additionally, opponents of the hotel occupancy tax as a funding mechanism will find further concern in SB 2622. The HOT is often criticized as a regressive, opaque tax on consumers that is frequently diverted from its intended purpose—supporting tourism—to underwrite risky or speculative real estate ventures. This bill reinforces that criticism by extending the HOT’s use for what is essentially a local economic development subsidy with limited oversight or outcome-based justification.

Finally, the bill risks setting a precedent for more municipalities to seek similar carveouts. Each exemption weakens the integrity of the state’s tax system, complicates revenue forecasting, and accelerates legislative demands for preferential treatment. The long-term effect is not only fiscal erosion but also a policymaking culture increasingly dominated by narrow interests rather than sound, equitable governance.

In light of these fiscal, structural, and policy concerns, Texas Policy Research recommends that lawmakers vote NO on SB 2622, reflecting a commitment to preserving state fiscal responsibility, limiting governmental intervention in the marketplace, and opposing the proliferation of preferential tax entitlements that benefit the few at the expense of the many.

• Individual Liberty: The bill does not directly infringe upon individual freedoms such as speech, movement, or personal autonomy. However, the indirect impact on individual liberty comes from the use of public funds (in the form of rebated state tax revenues) to support specific private developments without broad public accountability or voter approval. When tax policy is used to favor certain interests, the general public's trust in equal treatment under the law—and in their influence over fiscal decisions—can erode, weakening democratic legitimacy.
• Personal Responsibility: The bill undermines the principle of personal and local responsibility by enabling municipalities to rely on state-level tax rebates rather than financing their own development projects through local means. This removes incentives for careful fiscal planning, market-based project funding, or community-backed investment. In effect, it shifts responsibility for local outcomes onto state taxpayers, regardless of whether they receive any return on that investment.
• Free Enterprise: The bill violates free enterprise principles by granting special economic privileges to one municipality (Burleson) based on narrowly tailored criteria. These state-authorized tax rebates can give public-private hotel and convention projects an artificial competitive edge, distorting the market. Businesses in non-qualifying cities or entirely private ventures in the same sector must compete on unequal terms, making this a form of government-backed favoritism that contradicts open, fair competition.
• Private Property Rights: The bill does not directly infringe upon private property rights—there is no eminent domain or land-use control implicated. However, the use of public subsidies for local development may affect local property markets by increasing land values or redirecting infrastructure resources toward politically prioritized areas. This indirect influence can crowd out smaller, unsubsidized developers or shift municipal priorities away from serving broader community needs.
• Limited Government: The bill exemplifies government expansion through special exemptions and targeted economic interventions. Rather than reducing state involvement or simplifying the tax code, it deepens complexity by adding another municipality to an already lengthy and inconsistent list of exceptions. These carve-outs function as legislative earmarks and compromise the principle of equal protection under tax law. They also increase the administrative burden of monitoring and enforcing geographically limited tax rebates, further bloating state-local financial entanglements.

• HB 3182 (Same As)