Toth’s bill capping local government spending

The text as introduced · 492 words

By: Toth
H.B. No. 3537

A BILL TO BE ENTITLED

AN ACT

relating to a limit on local government 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 previous three-year average percentage change in

the chained consumer price index for the three preceding calendar

years published by the Bureau of Labor Statistics.

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

of the state's population during the preceding three-year average

percentage change for the last three calendar years, 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 to all political subdivisions.

(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 sum 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.

(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 or special purpose district that begins on or after December

1, 2025.

SECTION 3. This Act takes effect immediately if it receives

a vote of two-thirds of all the members elected to each house, as

provided by Section 39, Article III, Texas Constitution. If this

Act does not receive the vote necessary for immediate effect, this

Act takes effect September 1, 2025.