A lesser-known handout from taxpayers to private entities are local Hotel Occupancy Taxes, which are collected and allocated for the promotion of “tourism and the convention and hotel industry.” Cities may levy up to a seven percent tax on hotel bills, but not exceeding 15% in combination with state and county HOT rates, with the revenue required by law to be applied to a range of areas from facilities construction to promotion of the arts.

Often held out as a “tourist tax,” the reality is that while some localities may see most of their HOT tax paid by out-of-state tourists, most Texas towns that aren’t tourist destinations see the burden fall disproportionately on in-state visitors and small Texas businesses seeking to expand their markets.

An unintended consequence of the HOT is its deterrent effect on visitor spending at local businesses.  Studies have shown that: (A) as many as 95% of respondents identify price as a key consideration when booking accommodations, and (B) half of travelers altered their plans on account of high travel taxes, all of which indicate cutbacks on trips and other leisure activities.

While the Hotel Occupancy Tax remains an available stream of revenue for private developers, Texans can expect spending controversies and scandals to arise. Take Irving, for example, where an investigative report by ABC journalist Brett Shipp revealed the city squandered $23 million in a HOT-recipient project for expenses like limousine service, trips to luxury hotels in New York, alcohol, and other entertainment handed out to consultants.

In a transparent display and desperate grab for more hard-earned taxpayer dollars, the Texas Municipal League recently included applying hotel occupancy taxes to RV park stays in their legislative priorities, further indicating the scope-creep inherent in this and similar programs.

In the wake of the economic devastation brought by Chinese Coronavirus pandemic and the government-ordered shutdowns that followed, Texas lawmakers should work to lift the heavy burden imposed by hotel taxes on Texas travelers and towns.

Dr. Peter McCullough gave a groundbreaking testimony before the Texas Senate last Wednesday which was so powerful it made mainstream news nationwide.

In his testimony he had blistering rebuke of the government’s response and directions regarding the Chinese Coronavirus, Here are the highlights of the testimony that can be viewed above:

• Out of 50,000 peer-reviewed papers on COVID, none of them gave guidance on treatment except his paper, which was censored by big tech
• Home treatment has been discovered that would prevent 85% of hospitalizations and deaths
• The unsymptomatic spread of the virus is almost unheard of, and all that is needed to prevent is a simple temperature check at the door.
• There is no scientific rationale for ever vaccinating a COVID-recovered patient. natural immunity is vastly superior.
• No one under 50 should be vaccinated and Texas is currently at 80% herd immunity without vaccine effect.

A full video of Dr. McCullough’s remarks can be viewed here.

As conservatives know, government is an inherently greedy beast. It seizes every opportunity to grow and, in the words of Democrat Rahm Emanuel, it “never lets a good crisis go to waste.”

However, in combating the natural trend of bureaucracy to expand, conservatives have a powerful tool in their arsenal: zero-based budgeting.

Traditionally, appropriators in the Texas Legislature utilize what’s commonly referred to as “incremental” budgeting. Under that process, agencies begin at their previous appropriation amount and are provided increases to account for rising costs, population, etc.

Such a practice is inherently flawed because it rests on the assumption that the particular agency is running efficiently and revenue is spent appropriately. In addition to enabling waste, fraud, and abuse, the process is also rigid and slow to adapt.

Perhaps technological advancement has reduced the need for additional appropriations in a particular department, likewise changing demographics or other factors may require additional resources for another.

The answer to this should be a zero-based budgeting system. Under that process, the state budget is wiped clean every time and is re-calculated as if starting from scratch. That way, departments, agencies, and other government entities find it much tougher to spend your tax dollars inefficiently because they cannot count on current levels of spending to be maintained.

By implementing zero-based budgeting, lawmakers could make government smaller and more efficient for taxpayers while also allowing appropriators to be significantly more nimble in addressing new issues.

In 2016, Lt. Gov. Dan Patrick and Texas Senate Finance Chair Jane Nelson (R-Flower Mound) announced that they would begin incorporating zero-based budgeting into the state budget, drawing immediate praise from conservative lawmakers and Republican delegates at the Texas GOP convention.

Nelson continued that commitment in May of 2020 when she announced state agency budgets would begin at zero for the coming biennium.

That promise was kept throughout the budget process and lawmakers maintain that it will be continued in following sessions. But as always, citizens will have to keep an eye on the process and should continue to encourage lawmakers to codify the practice of zero-based budgeting into state law.

Perhaps the most hotly debated bill of the session thus far is House Bill 3, a proposal by State Rep. Dustin Burrows (R-Lubbock) to expand the executive authority of the governor during a pandemic.

In a hearing over the legislation in the House Committee on State Affairs, Burrows faced some tough questions from State Rep. John Smithee (R-Amarillo) regarding the constitutionality of his bill and the Texas Disaster Act in general.

On Monday, State Sen. Bryan Hughes (R-Mineola), laid out Senate Bill 12 before the Senate State Affairs Committee which he chairs.  Authored by Hughes and several other Senate Republicans, SB 12 seeks to prevent tech from censoring conservatives in Texas.

Hughes gave a powerful example of this censorship based on a pro-life ad that was rejected by Facebook in the clip below. Following the conclusion of testimony on the legislation, SB 12 was left pending in committee.

State lawmakers should repeal the property tax levied on business personal property and inventory. Only eleven states other than Texas levy such a tax.

Texas’ onerous property tax system requires that businesses pay taxes on both the land it occupies and its assets—including the inventory it uses to generate revenue. Business “tangible” personal property is defined as:

“[A]ll tangible personal property used by commercial and industrial businesses to produce income, including fixtures, equipment, and inventory.”

Taxing business in this manner is somewhat analogous to taxing families on their couch, computer, refrigerator, phone, or car. Frankly, if you used your dog to generate income, you’d pay property taxes on that too.

Taxing assets and inventory saddles small businesses and startups, punishing them even when they lose money or fail to generate positive cash flow. It also makes Texas less attractive to manufacturing, technology, and capital-intensive business investment.

Lawmakers in both parties have foolishly created taxpayer-handout programs in an attempt to “stimulate” business growth. In fact, in many ways, corporate handouts to big business have accelerated since Republicans gained control. At the behest of government-interest groups and crony chambers of commerce, lawmakers also created new taxing schemes for local governments under the guise of “economic development.”

The policy focus should alternatively be on lowering and repealing taxes altogether – such as the franchise and business personal property taxes – which would create a more attractive and equitable economic environment.

After all, a tax system that requires political influence for special tax treatment only benefits those in power, not the average taxpayer. It also breeds corruption.

In addition to the property taxes levied on real estate, business-personal property and inventory, thirteen separate categories of property are subject to taxation. Many of these account for a frivolous portion of the tax base and could likely be eliminated altogether, providing that local governments are prohibited from raising taxes on everyone else to make up the difference.

Instead of giving tax-funded handouts and special exemptions to companies with political influence, Texas should reverse its bad habits by repealing various taxes.

Texas could start by joining thirty-eight other states and repealing the oppresive business personal property tax.

Following Gov. Greg Abbott’s announcement that he would be ending his statewide mandatory mask order next week, we at Texans for Fiscal Responsibility asked our subscribers and supporters how they would react to businesses requiring masks.

Over a thousand Texans responded and an overwhelming majority said they would not support businesses that require masks.

Question: Once the mask mandate ends, will you continue visit businesses that still require them or go elsewhere?

Answer 1: Yes, I’ll still wear a mask: 24.08%

Answer 2: No, I won’t support them: 75.92%

A number of individuals also replied with further thoughts on Abbott’s decision:

“I am fed up with mask nazis expecting me to kowtow to an unnecessary mandate.” –Ann Marie

“He FINALLY did what is right.” –Keith

Over a decade ago, liberal lawmakers in the Texas Legislature from both parties came together and imposed an onerous tax on Texas’ businesses: the state’s franchise tax also known as the gross margins tax.

Since its inception, this tedious tax has imposed an unnecessary burden on Texas businesses and undermined our competitive edge.

While the tax was sold as a way to lower property taxes, it actually brings in a small fraction of Texas’ revenue, and property taxes have continued to climb—becoming some of the highest in the nation and one of the most cumbersome burdens Texans face.

The problem with a “business tax” is no matter how government tries to disguise it, businesses do not pay taxes; people always left footing the bill.

While the tax itself is undoubtedly burdensome for the businesses it impacts, the cost of compliance and calculation alone often rivals the imposed charge.

In addition to reducing and eliminating the tax altogether, conservatives should seriously structural reforms to the tax computation process to reduce compliance costs and make the tax substantially less onerous.

With the downturn in the state’s oil and gas market, legislators will be very resistant to fully repealing the tax and contending with the budget hole that it would create. However, with enough citizen pressure a structured phase-out bill is definitely on the table.