According to the Legislative Budget Board (LBB), HB 762 is not expected to have any fiscal impact on the State of Texas​. Since the bill imposes requirements only on political subdivisions (such as cities, counties, and local government entities) and not on state agencies or operations, no new state expenditures, revenues, or administrative burdens are anticipated.

For local governments, the bill is also expected to have no significant fiscal impact​. While political subdivisions must adjust their employment contracts and post severance agreements online, these administrative tasks are not projected to create substantial new costs. The bill mainly sets limits on future severance obligations rather than imposing ongoing administrative processes or requiring extensive new systems.

Overall, HB 762 is designed to constrain future liabilities for local governments by capping severance payments and prohibiting payouts in cases of misconduct, which could potentially save money over time by preventing excessive or unjustified severance awards. However, any potential cost savings are considered marginal and not substantial enough to create a notable budget impact at either the state or local level.

HB 762 responds to documented concerns about public officials in Texas receiving excessive severance packages—sometimes referred to as “golden parachutes”—even in cases of misconduct. The bill amends the Local Government Code to cap severance payments funded with tax dollars at the equivalent of 20 weeks’ compensation and prohibits any severance if the employee or contractor is terminated for misconduct. It also requires that severance agreements be publicly posted on the political subdivision’s website, enhancing transparency and public oversight​.

Importantly, this bill does not grow the size or scope of government. It imposes a constraint, not an expansion, by limiting local governments’ discretion to use taxpayer funds for severance purposes. No new agencies, programs, or enforcement bodies are created. Likewise, the bill imposes no new taxes and does not increase the burden on taxpayers. In fact, by curbing excessive or inappropriate severance payouts, it may help reduce potential long-term costs to the public. The Legislative Budget Board confirms there are no significant fiscal implications for the state or local governments​.

Additionally, the bill does not increase the regulatory burden on individuals or private businesses. Its provisions apply solely to political subdivisions and their contractual relationships with employees and independent contractors, and it excludes public or teaching hospitals from its scope. These provisions reflect a targeted, fiscally conservative approach aimed at ensuring accountability in the public sector while respecting local control.

By reinforcing transparency, limiting misuse of public funds, and holding public employees to a higher standard of conduct, HB 762 advances the principles of Limited Government, Personal Responsibility, and Individual Liberty. As such, Texas Policy Research recommends that lawmakers vote YES on HB 762.

• By requiring that severance agreements be publicly posted on political subdivisions’ websites, the bill promotes government transparency, which is a cornerstone of individual liberty in a constitutional republic. Transparency ensures that citizens can hold local governments accountable and that public funds are not misused in secretive or self-dealing arrangements.
• The bill directly reinforces personal accountability in the public sector. Employees and contractors who are terminated for misconduct—including criminal conduct—will no longer be eligible for severance. This change ensures that bad actors are not rewarded at public expense, and it sets a clear expectation that individuals must behave responsibly in their official roles or face the consequences.
• While the bill does not directly impact the private sector, it does regulate contracts with independent contractors, some of whom may be private entities. However, the restrictions only apply to the use of taxpayer dollars and are narrowly tailored to prevent misconduct-related payouts. By clarifying terms for public contracts, the bill could indirectly promote a more ethical and stable contracting environment, without adding burdensome regulations to private businesses.
• The bill has no direct impact on private property rights, as it deals strictly with government personnel and contracting policies. However, by ensuring that taxpayer funds (which originate from private property through taxation) are spent more responsibly, the bill may offer a modest indirect benefit by protecting citizens’ financial stake in their local government.
• HB 762 places clear limitations on how political subdivisions may use taxpayer funds, particularly in cases involving employee or contractor severance pay. By prohibiting payouts following misconduct and capping severance at 20 weeks of compensation, the bill reins in potentially wasteful or abusive local government spending. It reduces the discretion of local governments to enter into expensive or unethical severance agreements, thereby reinforcing fiscal discipline and preventing bloated public compensation practices.