According to the Legislative Budget Board (LBB), the bill would result in an estimated $5.32 million reduction in General Revenue-related funds during the 2026–2027 biennium. Additionally, there would be a $3 million loss to the Property Tax Relief Fund over the same period. Because the Foundation School Program depends on the Property Tax Relief Fund, any shortfall must be offset by additional appropriations from the General Revenue Fund.

The credits introduced by the bill can be applied against a range of state taxes, including distilled spirits and wine taxes, insurance premium taxes, franchise taxes, and oil and gas production taxes. The legislation caps the total amount of tax credits that can be issued at $10 million over two years, with the expectation that the full cap will be utilized during the 2026–2027 biennium. The distribution of these credits across tax categories is based on their respective shares in the state’s revenue projections for that period​.

Although the Texas Comptroller's office would be responsible for administering the credit program, the fiscal note indicates that administrative costs would be minimal and not significant. The bill includes a sunset provision: the tax credit program will expire on January 1, 2028, but any credits earned before that date may still be claimed thereafter. Importantly, no fiscal impact on local governments is expected as a result of the legislation.

While Texas Policy Research would generally oppose tax policy that favors specific behaviors or beneficiaries, SB 2018 is a narrowly scoped, temporary credit program that encourages voluntary private contributions to nonprofit organizations serving Texas families in crisis. The bill does not grow government, mandate spending, or create permanent entitlements—it simply allows private sector actors to redirect a portion of their tax liability toward vetted, community-based service providers. Ideally, the state would neither incentivize nor interfere with charitable giving and would instead lower the overall tax burden to allow philanthropy to thrive organically. However, given the bill’s limited fiscal impact, strong accountability provisions, and emphasis on civil society solutions over government programs, Texas Policy Research recommends that lawmakers vote YES on SB 2018, with the recognition that this support is based on the bill's restraint and alignment with personal responsibility and limited government principles.

• Individual Liberty: The bill promotes individual liberty by empowering private individuals and businesses to direct a portion of their tax liability toward nonprofits that reflect their values and priorities. Rather than expanding state-run programs, it encourages a decentralized approach to public welfare, allowing more personal freedom in how resources are used to support community needs.
• Personal Responsibility: By incentivizing contributions to organizations that provide family-strengthening services, like parenting support, kinship care, and trauma recovery, the bill reinforces the value of personal and familial responsibility. These nonprofits often focus on helping people improve their own lives rather than fostering dependency, aligning with the idea that support structures should empower individuals to take charge of their circumstances.
• Free Enterprise: The bill leverages free enterprise by involving private-sector dollars in public good efforts through voluntary contributions. However, it could be seen as bending market neutrality by favoring businesses that participate in the program. While it avoids heavy-handed mandates or subsidies, the use of targeted tax credits does introduce a form of selective benefit that tilts the playing field, albeit in a limited and voluntary fashion.
• Private Property Rights: The bill gives businesses more discretion over the use of their financial resources. Instead of sending tax dollars directly into the general revenue fund, participants can direct those funds to qualified nonprofits. This is a modest reinforcement of private control over property (in this case, money), respecting the principle that individuals and businesses should be stewards of their resources.
• Limited Government: Rather than expanding government services or appropriating new funds, the bill partners with the private sector and civil society to address social challenges. It also includes a sunset clause, imposes tight administrative cost caps on recipient nonprofits (5%), and limits total credits to $10 million over two years. These design features ensure the program remains small in scale and bounded in duration, aligning with a philosophy of minimal, targeted government intervention.

• HB 3232 (Same As)