Lakeway officials discuss possibilities for ample hotel tax fund to provide COVID-19 relief

Lakeway City Council, shown here during a Jan. 13 meeting, met virtually May 4 for a special called meeting, (Brian Rash/Community Impact Newspaper)
Lakeway City Council, shown here during a Jan. 13 meeting, met virtually May 4 for a special called meeting, (Brian Rash/Community Impact Newspaper)

Lakeway City Council, shown here during a Jan. 13 meeting, met virtually May 4 for a special called meeting, (Brian Rash/Community Impact Newspaper)

During a special called meeting May 4, Lakeway City Council discussed the use of hotel tax money for economic recovery.

Mayor Sandy Cox said she has been engaging in discussions with the Texas Lodging Society and Gov. Greg Abbott’s office with regard to using hotel occupancy tax money to aid recovery efforts from the economic damage caused by the coronavirus pandemic.

“Although the governor’s office has not made any decisions publicly at this point, it is something they may make a ruling on in the coming months,” Cox said, adding hotel lobbying entities are encouraging state lawmakers to nix any policy changes to Texas’ existing hotel tax law, which states the funds can only be used in the promotion of tourism. “The real pot of money we have to help our small businesses at this time is this pot of money, so how could you utilize it?”

Cox said a portion of the city’s hotel tax money could be given to hoteliers in Lakeway, or officials could put together a marketing plan geared toward helping market area businesses to bring to Lakeway.

“Of course, that is a chicken and egg scenario, because if the businesses aren’t up and running, are people likely to stay here if they don’t have anything they could utilize for entertainment?” Cox said.


The third idea Cox proffered for hotel tax money is for Lakeway to create an event such as an arts festival to bring people to Lakeway and hopefully increase sales tax revenue and benefit local businesses.

Lakeway’s hotel tax coffers have about $5 million, and City Council has allocated a small fraction of that amount in 2019 for projects promoting tourism to Lakeway. Three of the biggest allocations last year were $50,000 for the art production company TexARTS, $20,000 for the Lakeway Resort and Spa, and $40,000 for the Lake Travis Film Festival.

The Lake Travis Chamber of Commerce also received $2,500 from the fund in September.

The growing funds in the city’s budget and how to allocate them were a marquee topic for Lakeway officials during several city meetings in 2019. During a June 24 special meeting, Council Member Louis Mastrangelo said Lakeway’s hotel tax allocations had so far been inconsequential.

"Since I have been on council, we've had three requests, and all three requests don't make the slightest dent," Mastrangelo said.

Council ultimately tabled the discussion but agreed to bring the topic back at a later meeting.
By Brian Rash
Brian has been a reporter and editor since 2012. He wrote about the music scene in Dallas-Fort Worth before becoming managing editor for the Graham Leader in Graham, Texas, in 2013. He relocated to Austin, Texas, in 2015 to work for Gatehouse Media's large design hub. He became the editor for the Lake Travis-Westlake publication of Community Impact in August 2018. From there he became a dual-market editor for Community Impact's New Braunfels and San Marcos-Buda-Kyle editions. Brian is now a senior editor for the company's flagship papers, the Round Rock and Pflugerville-Hutto editions.