According to the Legislative Budget Board (LBB), the bill's overall fiscal impact is indeterminate, primarily because the cost of the new state aid program depends on future legislative appropriations that are not required under current law. Specifically, beginning September 1, 2027, the bill authorizes additional state aid for school districts and open-enrollment charter schools that do not participate in the TRS ActiveCare health insurance program. However, because the amount of aid is tied to future appropriations above the statutorily required funding level for TRS ActiveCare, the LBB concluded that the resulting cost to the Foundation School Program cannot currently be estimated.

The LBB also determined that the bill would have no significant fiscal impact on the Teacher Retirement System (TRS) ActiveCare program. Although the legislation allows certain school employers to reenter TRS ActiveCare before the expiration of the existing five-year waiting period, the committee substitute requires those employers to pay a risk stabilization fee. TRS reported that this fee is expected to offset any additional costs associated with early reentry, allowing the program to absorb those costs using existing resources.

For local governments, the fiscal effects are likewise uncertain. School districts that participate in TRS ActiveCare could experience changes in their health insurance costs depending on whether participation in the statewide program is more or less expensive than obtaining coverage independently. Conversely, districts and charter schools that remain outside TRS ActiveCare could receive additional state funding if future Legislatures appropriate supplemental funding for the program after fiscal year 2027. Because both outcomes depend on future participation decisions and legislative appropriations, the LBB concluded that the local fiscal impact cannot be determined at this time.

HB 2911 addresses legitimate concerns regarding school district flexibility and unequal treatment of districts that do not participate in the TRS-ActiveCare program. However, it does so by expanding the state's financial role in public employee health insurance rather than reducing government involvement. While the bill does not create a new agency or regulatory program, it establishes a new statutory entitlement to additional state aid for districts and charter schools that operate outside TRS-ActiveCare, increasing the scope of state financial obligations. Although future appropriations remain subject to legislative discretion, the bill creates an expectation of ongoing state support that could increase pressure for additional taxpayer funding in future legislative sessions.

The Committee Substitute mitigates some concerns by requiring a temporary risk stabilization fee for districts that reenter TRS-ActiveCare early, reducing the likelihood that existing participants subsidize those decisions. Nevertheless, the legislation expands the state's role in financing employee health benefits rather than encouraging a more market-oriented approach or reducing existing state obligations. The Legislative Budget Board concluded that the fiscal impact of the additional state aid cannot be determined because it depends on future appropriations, leaving taxpayers exposed to potentially increasing long-term costs.

The bill imposes little direct regulatory burden on individuals or private businesses and largely preserves local decision-making regarding employee health coverage. However, from a limited-government perspective, the creation of a new state aid mechanism represents an expansion of government spending and establishes a precedent for extending state subsidies beyond the existing TRS-ActiveCare program. While the bill seeks to promote equity among school districts, those objectives could be pursued through broader reforms that reduce state involvement rather than creating an additional avenue for state financial assistance. For these reasons, Texas Policy Research recommends that lawmakers vote NO on HB 2911.

• Individual Liberty: The bill does not impose new mandates, prohibitions, penalties, or restrictions on individuals. It primarily affects the relationship between the state and public school employers by modifying participation rules for TRS-ActiveCare and adjusting state funding for employee health benefits. Individuals retain the same ability to enroll in health plans offered by their employers, and the bill neither expands nor contracts personal freedoms in a meaningful way.
• Personal Responsibility: By creating an additional mechanism for state financial assistance to school districts that do not participate in TRS-ActiveCare, the bill increases reliance on state funding to support employer-provided health insurance. Rather than encouraging districts to fully bear the financial consequences of their health plan decisions, the legislation expands the availability of taxpayer-funded support regardless of whether a district participates in the statewide program. While the bill promotes funding parity, it also shifts a greater share of health benefit costs toward the state.
• Free Enterprise: The bill neither substantially increases nor decreases market competition. School districts retain the flexibility to purchase health insurance through private carriers instead of TRS-ActiveCare, and the additional state aid may reduce a funding disparity that previously favored participation in the state program. At the same time, the bill continues state involvement in subsidizing public employee health benefits rather than moving toward a more market-driven system. Overall, its impact on competition is limited.
• Private Property Rights: The bill does not affect the ownership, use, or regulation of private property. It creates no new authority related to land use, eminent domain, asset forfeiture, or property regulation.
• Limited Government: Although the bill does not create a new agency or significant regulatory framework, it expands the state's role by establishing a new statutory mechanism for providing additional state aid to school districts and charter schools that do not participate in TRS-ActiveCare. This broadens the scope of state financial involvement in public employee health benefits and creates the potential for increased taxpayer expenditures through future legislative appropriations. The committee substitute's risk stabilization fee mitigates financial risk to the existing TRS-ActiveCare program, but it does not eliminate the broader expansion of state financial commitments. From a limited-government perspective, the bill modestly increases the size and scope of government.