According to the Legislative Budget Board (LBB), the fiscal implications of HB 245 are currently indeterminate. The bill allows qualifying military service to be credited as law enforcement or custodial officer service under the Law Enforcement and Custodial Officer Supplemental Retirement Program (LECOS). While this may increase the amount of service credit some members can apply toward retirement, the actual financial impact cannot be calculated at this time.

The primary challenge in estimating the cost stems from a lack of data—specifically, how many ERS members would qualify under the bill’s provisions and how many would choose to purchase the additional credit. Since the bill ties the cost of purchasing military service credit to the member’s first full month of post-military law enforcement or custodial service, the financial effect would vary on a case-by-case basis. Without a clear picture of how many participants fall into this category or the average length of military service being claimed, neither ERS nor the LBB can confidently estimate the impact on the retirement fund.

Despite this uncertainty at the state level, the LBB concluded that there would be no significant fiscal implication for units of local government. The bill pertains solely to the state-run ERS and LECOS systems and does not impose mandates or financial obligations on local entities​.

HB 245 addresses a longstanding fairness issue by allowing eligible members of the Employees Retirement System of Texas (ERS) to establish military service credit specifically as law enforcement or custodial officer (LECO) service, provided they have qualifying post-military service in those roles. The bill responds to constituent concerns over inconsistent application of current rules and provides a more equitable pathway for veterans transitioning into public safety careers. It reinforces the principle that military service—particularly when followed by service in high-risk state roles—should be properly recognized within retirement classifications.

While the bill does carry fiscal uncertainties, as noted by the Legislative Budget Board, these risks are indirect and hinge on participation levels and fund behavior. The bill does not directly increase the burden on taxpayers, expand government programs, or impose new regulatory requirements. Participants are required to pay to establish the credit, ensuring some cost-sharing. From a limited government standpoint, the bill remains narrowly targeted and voluntary in nature.

Although an “Amend” recommendation could be justified based on prudent fiscal caution, we ultimately recommend a Yes vote based on the principle of fairness for veterans and the need to resolve ambiguities that have created unequal treatment under ERS. It would be wise, however, for lawmakers to monitor ERS data on uptake and cost impact after implementation and revisit the policy if needed. Texas Policy Research recommends that lawmakers vote YES on HB 245.

• Individual Liberty: The bill empowers public servants who are military veterans by giving them the choice to establish creditable retirement service as law enforcement or custodial officer (LECO) service. This corrects administrative inconsistencies and ensures that individuals are not unfairly penalized or excluded from benefits based solely on ambiguous interpretations of current law. It supports the idea that individuals who have served both in the military and in high-risk state roles should be allowed equitable recognition of that service. By providing this option, the bill expands individual freedom within the retirement system.

• Personal Responsibility: The bill retains the principle of self-contribution: eligible members must pay for the military service credit they seek to establish. The cost is based on the member’s post-military contributions, which ensures fairness and prevents cost-shifting to the state or other retirees. This approach reinforces the notion that individuals should bear the financial responsibility for enhancing their retirement benefits, which is consistent with this principle.

• Free Enterprise: Because the bill applies solely to public sector employees and has no bearing on private employers, businesses, or the broader economy, it does not impact the principle of free enterprise.

• Private Property Rights: There is no infringement or expansion of property rights or eminent domain involved in this legislation.

• Limited Government: On one hand, the bill does not expand government powers, create new agencies, or impose new mandates. On the other hand, it could introduce additional administrative complexity within ERS and—if not monitored—lead to future fiscal pressure on the pension system. While these are manageable risks, they do introduce long-term considerations about government obligations and financial stewardship. This makes the impact neutral to slightly negative from a strictly limited-government perspective.