The Economic Impact of Bathroom Bills

By April 27, 2017Blog

Bathroom bills like Senate Bill 6 and now House Bill 2899 have been hotly contested issues in Texas’ current legislative session. On the surface, both bills may appear to be inherently different, but the response from the business community has remained the same: Businesses will not tolerate any form of discriminatory legislation.

Recently, AngelouEconomics (AE) released an economic impact study which investigates the economic cost of discriminatory legislation in Texas. In total, the study finds that Texas may experience losses up to $5.6 billion if a bathroom bill passes. 

Perhaps the most palpable way that discriminatory legislation affects the Texas economy, is through disruptions in the travel and tourism industry – the second largest sector in Texas. Numerous businesses and organizations hold conferences and events throughout Texas each year. The majority have zero tolerance for discriminatory regulation that might threaten attendees. In response to these bathroom bills, many conferences have stated their intent to withdraw or have expressed their concern over hosting future events in Texas should this legislation pass.

Similarly, many capital investment projects are also in jeopardy due to these bathroom bills. In order to be competitive on global markets, businesses need to be able to attract the best and brightest workers – especially among young millennials. When choosing a new community to settle, young professionals prefer to live in areas that reflect inclusive social policies and values, since they align with their personal beliefs.

Overwhelmingly, Millennials oppose bathroom style bills, and businesses have taken notice. Many are hesitant to invest in a community that will prove to be costly, and inhibit them from attracting young talent.

To quantify these costs, AE considered three economic impact models: confirmed departures, threatened departures, and potential losses. Conferences and capital investments were sorted into each model accordingly, based on information gathered through open letters, news articles, public testimony and two anonymous surveys administered by AE to economic development professionals.

The confirmed departures model is comprised of conferences and capital investment projects that have already withdrawn, or intend to withdraw from Texas should a bathroom bill pass. In total, these organizations represent $1.04 billion in total economic impact through 2026.

The threatened departures model is comprised of conferences and capital investment projects that have spoken out against Senate Bill 6, but have yet to state whether they will withdraw future events or investments. These at-risk opportunities for Texas represent $4.1 billion in total economic impact through 2020.

Finally, the potential losses model includes the impact of events such as the NBA All-Star Game and NFL Super Bowl – two events that are not currently scheduled to take place in Texas in the coming years, but would be in serious jeopardy should this legislation pass. In total, these two events represent $450 million in economic impacts to the state.

From an economic development standpoint, it is important to remember that nobody is flocking to Texas in response to these bills. The study clearly demonstrates that bathroom bills are driving businesses away, and that is not good for our economy. When you consider what is at stake, these bathroom bills are simply not worth it.

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