Brownsville projects 36% increase in HOT tax revenue

The City of Brownsville expects a 36% increase in hotel occupancy tax revenue for fiscal year 2023 over previous years, though many nonprofit groups that typically request HOT revenue are asking for more for the next exercise.

HOT revenue is generated from lodging reservations and car rentals and, according to the Texas tax code, must be used to directly support the tourism and lodging industry in addition to other criteria.

In an Aug. 2 presentation to the Brownsville City Commission, communications and marketing director Monica Tellam said the city plans to have a HOT fund balance of about $1 million by Sept. 30. and forecast over $1.8 million in HOT revenue for the next fiscal year. .

“We are very proud of this number,” she said, noting that the 36% jump is one of the highest in the state among municipalities.

There is, however, a gap of $258,494 between the revenue the city projects for fiscal year 2023 and the total amount requested in the last round of applications, or more than $2.1 million, Tellam said. Whether that gap is bridged by income from a segregated fund is entirely up to the commission, she said.

Gladys Porter Zoo received $448,724 in HOT funds in fiscal year 2022, but is requesting $550,000 for fiscal year 2023, a 23% increase. Some organizations are asking for much more: Charro Days Inc. asked for $50,000, a 150% increase from the $50,000 received last year. The Mitte Cultural District requested $60,000 for 2023, a 300% increase from the $15,000 received in 2022.

The Brownsville Historical Association requested $200,000, a 125% increase from the $88,700 in HOT funds it received in 2022, while the Children’s Museum of Brownsville submitted a request for $80,000 for 2023, that’s a 49% increase from the $53,550 received in 2022. The National Gallery, which got $63,750 last year, is asking for $78,000 for 2023, a difference of 22%.

The Brownsville Society for the Performing Arts received $41,000 in HOT funds in 2022 and is requesting $45,000 for 2023, a 10% increase. The Gorgas Science Foundation (Sabal Palm Sanctuary) requested $37,000 for 2023, a 15% increase from the $32,263 it received in 2022. Camille Players Inc. received $23,250 during the l 2022 financial year but did not apply for HOT 2023 funds.

The nonprofits applying for HOT funds for the first time are the Mr. Amigo Association ($75,000); Brownsville Oktoberfest ($25,000); Vacation Village ($10,000); Rav Run ($5,000) and Sombrero Festival ($165,000), Tellam said. All applicant organizations were deemed by an audit committee to fully meet the HOT funding criteria, although information is still pending for the Brownsville Wellness Coalition, which received $20,000 in 2022 and is requesting the same amount for 2023.

Tellam said the city has spent the last year consolidating the process to ensure organizations that receive HOT funds meet eligibility criteria by reviewing their quarterly reports and working together to address any concerns.

In response to a question from At-Large City Commissioner “A” John Cowen Jr., who noted that the Texas Hotel & Lodging Association recommends that groups receiving HOT funds have a way to track visitors from outside the town, Tellam said they are free to follow visitors as they wish, although they have been given guidance.

“We provided guidance through the Texas Arts Commission and THLA,” she said. “They have a joint recommendation on how to spend HOT funds and how to track them for arts organizations.”

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