Bell County moves closer to imposing hotel occupancy tax (TX)

Bell County is one step closer to a 2 percent hotel occupancy tax that will reportedly assist with renovations and upkeep of the Bell County Expo Center.

HB 2019, a bill authorizing the imposition by certain counties of a hotel occupancy tax, was heard Tuesday before the Senate Committee on Natural Resources & Economic Development. (Hearing starts at 46:00)

With introducing a committee substitute version, bill author Rep. Kel Seliger, R-Amarillo, laid out how the bill’s original version was to update the current statute’s population brackets based on growth in counties like Midland.

Referring to the committee substitute bill, Seliger said, “It adds provision in which the commissioners court of a county with a population of more than 300,000 and in which there is located a part of a military installation may impose a hotel tax.” He added the tax must be within certain limits.

Committee Chairman Troy Fraser, a Horseshoe Bay Republican, offered the following comments:

The substitute that he’s (Seliger) adding in is bracketed to include Bell County too, which I represent, to collect the hotel tax up to 2 percent. I received resolutions of support from all the cities and Chambers of Commerce of Bell County as a request from the county judge and county commissioners for adding this tax to help with renovations and the upkeep of Bell County.  We do believe we have the unanimous support of all the cities, chambers and county of Bell County.

The measure subsequently passed out of committee with an 8-0 vote.

Fraser’s reference to Bell County renovations and upkeep refer to a planned expansion of the Bell County Expo Center. On Monday, the Bell County Commissioners Court approved the issuance of $31 million in new certificates of obligation.

Certificates of obligation, a mechanism allowing debt issuance without voter approval, have become controversial as taxpayer advocates note their increased use for projects unlikely to pass with an election. Like other bond packages, the publicly stated dollars for COs don’t usually reflect interest for which taxpayers will also be responsible. With interest often representing 40 percent of the principal, this issuance creates closer to $50 million worth of new local government debt.

That said, the newly approved CO funds along with the refinancing of another $4 million in existing debt will be used for the Expo Center project.

“Right now the Expo Center brings in $12 million to $13 million in direct economic benefit per year,” Bell County Commissioner Bill Schumann told the Temple Daily Telegram during an April interview. “The additions could raise that amount to as much as $20 million.”

Despite renovation funds now secured, the Expo Center’s county-subsidized operating costs are still at issue. County officials say they wanted the hotel occupancy tax in lieu of financing the current $800,000 deficit via property taxes.

“We could have had a property tax rate decrease if we’d had a hotel/motel tax rate,” County Judge Jon Burrows said at Monday’s meeting. “But we’re still doing this without a property tax rate increase.”

State Rep. Molly White, R-Belton, announced in March that she would not carry legislation for establishment of the hotel occupancy tax.

“It concerns me that not all of the three state leaders that represent Bell County and the district are on board with this tax,” White said in a written statement. “The two senior lawmakers from Bell County have declined to lead on this; local officials must get them on board if this bill is to have any chance in passing.”

After headlines like Rep. White Opposes Tourism Bonanza and White kills county’s hotel/motel tax hopes, White further responded:

Moreover, I want to take a moment to share with the constituents of HD 55 as to why the information surrounding the hotel occupancy tax did not provide sufficient details for a prudent decision. The discussion surrounding the hotel occupancy tax began shortly after I won the primary election in March of 2014. Bell County officials approached me about the need for an expansion to the Exposition Center and how, they believe, a hotel occupancy tax would cover the cost of that expansion. I agree the expansion would benefit our community and offered local officials suggestions on how to raise revenue without raising taxes.

It is worth noting that the former Representative did not support the tax during his term, nor has Representative Aycock. The past and current unwillingness of senior legislators from Bell County to carry this legislation should be noted.

Expressing other concerns, White said her questions were met with “vague documentation, a different explanation of how the tax revenue was going to be spent than what was originally expressed and the consistent reality that not all senior members were on board with the tax.”

After Tuesday’s vote, it appears Bell County’s most senior state legislator, Fraser, is on board and giving the hotel occupancy tax new life. When asked if she would offer this new bill as an amendment to any legislation on the House side, White replied she has no such plans.

The legislative session runs through June 1.

Lou Ann Anderson is an information activist. As a contributor at Watchdog Wire Arena, Raging Elephants Radio and Examiner Austin, she writes and speaks on a variety of public policy topics. Lou Ann is the creator and online producer at Estate of Denial®, a website that addresses probate abuse via wills, trusts, guardianships and powers of attorney as well as other taxpayer advocacy issues.

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