Relating to the eligibility of presidential general election debates for distributions from a Major Events trust fund.

Senate Bill 541 would add the Commission on Presidential Debates to the list of eligible site selection committees and make presidential general election debates eligible under the Major Events Trust Fund. Municipalities and counties that host these events could receive funds from the Major Events Trust Fund (funded by incremental local and state sales and use, auto rental, hotel, and alcoholic beverages taxes generated by the events) to defray the cost and special expenses linked to hosting the events. Each presidential general election debate would be considered a different event.

The goal of the Major Events Trust Fund is to attract to Texas major events that could have been hosted elsewhere, as well as the tourist activity that comes with them. The fund helps defray the cost of hosting the events thanks to the incremental revenues in local and state sales and use, auto rental, hotel, and alcoholic beverages taxes generated by these events. The incremental tax revenues must be equal to or over $1 million over a period of one year starting two months before the date of the event.

The Major Events Trust fund is made up of the incremental increase in receipts from the local sales and use, mixed beverages, and hotel occupancy taxes, and an amount in state sales and use, car rental, hotel occupancy and mixed beverages taxes equal to 6.25 times the amount of local incremental tax revenues, not to exceed the state incremental increase in tax receipts estimated to be generated by the qualifying event.

Low and limited taxation is the best incentive to attract out-of-state events and visitors, and encourage economic development. Instead, the Major Events Trust Fund is counting on an array of taxes, that impact Texans as well as visitors, to subsidize municipalities and counties to host certain events at the expense of other and possibly better events. The higher and more numerous the taxes, the less money will be left for visitors to spend in the local economy hosting the event, having an effect counterproductive to the goal of hosting a major event.

Presidential general election debates are also mostly followed by a TV audience, and hence unlikely to bring many out-of-state visitors. Senate Bill 541 would simply add to the list of favored events for special tax treatments, increasing the role of government and hindering free markets in the process. The role of a limited government does not include deciding which events should get preferential treatments. Consequently, we oppose Senate Bill 541.