News Flash

Inside the Park Board

Posted on: December 3, 2018

A Penny With A Purpose

When visitors to Galveston stay overnight in a hotel, condo, bed and breakfast or short-term rental, they are assessed a 15% tax known as the Hotel Occupancy Tax (HOT). These funds help keep our beaches clean, protect beachgoers, market Galveston to potential visitors and more. Here’s how HOT works.

HOT was created as a funding mechanism to provide communities ways to increase visitation. The tax is imposed on visitors, not residents, and helps foster economic growth, local employment and increases sales tax revenues. The State of Texas mandates how HOT funds can be spent.

Here in Galveston, the restricted funds are divided into 15 “pennies;” a penny for each percentage of tax collected.  

Each year, the Park Board, with input from tourism stakeholders, sets the value of the HOT penny based on revenue projections. The value of the penny was set at $2,040,000 for the fiscal year 2018-2019. This means that hotel tax in Galveston is expected to generate $30,600,000.

Each penny has a purpose and is allocated for specific tasks and programs in the following way:

  • Six pennies go to the State of Texas. Four of which remain in the state general fund. Because the Park Board is a separate entity specifically tasked with driving tourism, the state sends two pennies back to the Park Board to be used for beach cleaning, beach nourishment and Beach Patrol.
  • The Galveston Island Convention Center receives 4.125 pennies. Of these, 2.125 pennies go toward its operations and the remaining two pennies pay the bonds that built it. Any remaining funds in this budget at the end of the fiscal year, are considered trickle down funds and are administered by the City of Galveston.
  • Four pennies go to the Park Board. Three of these are for the express purpose of sales and marketing efforts that keep tourists coming back to the island. Beach Patrol and beach cleaning share the remaining penny.
  • The City of Galveston and the arts receive the remaining .875 penny with .75 allocated for arts and historic preservation grants and .125 for historic buildings in Galveston.

“Residents benefit greatly from this tax paid for by visitors,” Park Board Executive Director Kelly de Schaun said. “In addition to keeping our beaches clean and nourished, these funds support island amenities like the trolley system, Broadway beautification and numerous non-profits that enhance our quality of life.”

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Park board meetings are typically held on the fourth Tuesdays of the month at 1:30p.m. at 601 23rd St. 



 


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