bill capping city and county spending at last year’s total

The text as introduced · 495 words

89R930 AMF-D

By: Cain
H.B. No. 325

A BILL TO BE ENTITLED

AN ACT

relating to a limit on municipal and county expenditures.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Chapter 140, Local Government Code, is amended

by adding Section 140.014 to read as follows:

Sec. 140.014. LIMIT ON ANNUAL EXPENDITURES. (a) In this

section:

(1) "Board" means the Legislative Budget Board.

(2) "Consumer price index" means the average over a

calendar year of the index the board considers to most accurately

report changes in the purchasing power of the dollar for consumers

in this state.

(3) "Inflation rate" means the amount, expressed in

decimal form rounded to the nearest thousandth, computed by

determining the percentage change in the consumer price index for

the preceding calendar year as compared to the consumer price index

for the calendar year preceding that calendar year.

(4) "Population growth rate" means the rate of growth

of the state's population during the preceding calendar year,

expressed in decimal form rounded to the nearest thousandth,

determined by the board in accordance with the most recent

population estimates published by the United States Census Bureau.

(b) This section applies only to a political subdivision

that is a municipality or county.

(c) Except as provided by Subsection (e), a political

subdivision's total expenditures from all available sources of

revenue in a fiscal year may not exceed the greater of:

(1) the political subdivision's total expenditures

from all available sources of revenue in the preceding fiscal year;

or

(2) an amount determined by multiplying:

(A) the political subdivision's total

expenditures from all available sources of revenue in the preceding

fiscal year; and

(B) the sum of one and the rate most recently

published by the board under Subsection (d).

(d) Not later than January 31 of each year, the board shall

publish a rate equal to the product of the population growth rate

and the inflation rate.

(e) A political subdivision's total expenditures from all

available sources of local revenue in a fiscal year may exceed the

amount described by Subsection (c) if:

(1) the political subdivision's voters approve the

additional expenditures for that fiscal year at an election called

for that purpose and held on a uniform election date; or

(2) the governor declares or renews a declaration of a

state of disaster under Section 418.014, Government Code, in that

fiscal year, and the governor's designation of the area threatened

includes all or part of the geographic territory of the political

subdivision.

(f) For purposes of this section, the following are not

considered an available source of revenue:

(1) money received from the issuance of bonds approved

by the voters; or

(2) a grant, donation, or gift.

SECTION 2. Section 140.014, Local Government Code, as added

by this Act, applies only to a fiscal year of a municipality or

county that begins on or after December 1, 2025.

SECTION 3. This Act takes effect September 1, 2025.