Travis County will enter into negotiations with the city of Austin to create a joint venue tax district, following an executive session discussion at Tuesday's commissioners court meeting.

Travis County is authorized by the state to levy a venue tax, an optional additional hotel occupancy tax, that cannot exceed 2 percent and must be approved by the state's comptroller, attorney general and through a voter referendum. The proposed tax would generate between $15 million-$20 million in revenue annually, according to county staff.

The combined state, county and local hotel occupancy tax cannot exceed 17 percent for any jurisdiction within the county. The city of Austin currently levies a 9 percent hotel occupancy tax, 2 percent of which is comprised of a venue tax. The city's tax is in addition to the state's 6 percent hotel occupancy tax, which puts the current combined hotel occupancy tax rate at 15 percent.

The city of Austin is considering raising its local hotel occupancy rate to 9 percent in addition to the 2 percent venue tax to help pay for a possible expansion of the convention center. If the city chooses to pursue this increase, the combined local occupancy tax and venue tax levied by the city would max out the 17 percent cap allowable by state law, and Travis County would be unable to levy its own venue tax.

Travis County commissioners sent two letters earlier this summer to Austin Mayor Steve Adler expressing the county’s desire to partner on a joint two percent tax to fund future venue projects. Eckhardt said the county received some interest back from the city.

“I think the time would be right for us to send another letter saying we feel strongly that the city and county partner up on a city and county venue district for the purpose of redeveloping the Exposition Center and Decker Lake in the near future,” Eckhardt said.

Commissioner Brigid Shea agreed and added there is a need to think outside of the boundaries of downtown Austin.

“We’ve talked a lot about the importance of investing in areas to the east where people are being pushed out to,” Shea said. “I would certainly encourage the city to be broadminded in thinking how to get the best result for the larger community.”

If approved, the county plans to utilize the funds to redevelop the county's Exposition Center and the surrounding area that includes Decker Lake, Eckhardt said. Commissioners plan to send a letter to Mayor Adler, the city manager and City Council initiating negotiations.