According to the Legislative Budget Board (LBB), SB 393 would not have a significant fiscal impact on the state of Texas. The LBB notes that any administrative costs associated with the bill’s implementation could be absorbed using existing resources, suggesting minimal operational or budgetary disruption at the state level.

For local governments, however, the bill could present notable implications. It would restrict political subdivisions from issuing public securities to purchase or lease tangible personal property if the asset's useful life ends before the maturity date of the debt. This means that local entities—such as school districts, municipalities, and special districts—may face limitations on how they finance short-lived equipment and similar purchases. These entities may need to adjust their capital planning and potentially use alternative funding mechanisms like cash purchases or shorter-term financing to comply with the new requirements.

The net fiscal impact on local governments will likely vary depending on current debt practices. Subdivisions that have historically matched debt maturity closely with asset life may experience little change. Conversely, jurisdictions that have used longer-term debt for short-lived assets will need to reform their financing strategies, which could involve upfront cost increases or greater reliance on reserves and operating funds. Over time, the policy could lead to more prudent fiscal management and reduced long-term debt obligations for local taxpayers.

SB 393 addresses a significant concern in local fiscal management by placing practical limits on the types of debt political subdivisions in Texas can issue. The bill arises from mounting alarm over local governments incurring long-term debt for short-lived assets, a practice that has contributed to the rapid growth of local debt—reported at $333.32 billion as of the end of 2024, with an $81.45 billion increase over five years. This trajectory not only risks financial instability for local governments but also imposes greater burdens on taxpayers, potentially eroding gains made in property tax relief. By aligning debt maturity strictly with asset longevity, SB 393 seeks to halt this unsustainable trend and improve fiscal discipline across Texas communities.

The legislative changes codified in this bill prohibit political subdivisions from issuing public securities to purchase or lease tangible personal property whose depreciable life ends before the debt's maturity date. It also extends existing limitations on general obligation bonds to include certificates of obligation and anticipation notes, ensuring a broader and more consistent application of prudent fiscal constraints. These measures aim to reinforce the connection between borrowing and actual asset usage, thereby discouraging practices that could leave future taxpayers paying for assets long past their useful life.

No significant fiscal impact is anticipated at the state level, and local governments are not expected to incur new costs beyond a necessary shift in financial planning. The bill is aligned with principles of limited government and personal responsibility, ensuring that local entities operate within realistic, taxpayer-conscious financial bounds. With broad policy support and strong alignment with conservative fiscal values, Texas Policy Research recommends that lawmakers vote YES on SB 393.

• Individual Liberty: The bill does not directly restrict or expand individual freedoms. It focuses on the fiscal practices of political subdivisions rather than the rights of private individuals. However, by promoting responsible government spending, it indirectly supports long-term liberty by protecting taxpayers from future financial obligations incurred irresponsibly by their local governments.
• Personal Responsibility: The bill reinforces the principle of personal responsibility at the institutional level. By requiring political subdivisions to match debt maturities with asset lifespans, it holds local governments accountable for sound financial decisions. This ensures that elected officials and administrators act with greater foresight and discipline, mirroring the fiscal prudence expected of private citizens and businesses.
• Free Enterprise: The bill does not interfere with private market dynamics or impose regulatory burdens on businesses. However, by potentially reducing excessive government borrowing, it may decrease pressure on local tax bases and create a more stable economic environment for businesses in the long run.
• Private Property Rights: While the bill does not directly address property rights, its intent to reduce local government debt could help protect property owners from higher property taxes used to service imprudent debt. In this way, it contributes to a framework where property ownership is less vulnerable to fiscal mismanagement at the local level.
• Limited Government: The bill is a textbook example of legislation that advances the principle of limited government. By curbing a specific, non-transparent borrowing practice and imposing statutory fiscal constraints, the bill ensures that the government remains restrained, responsible, and transparent in its financial operations. This aligns with the platforms of both the Republican and Libertarian parties of Texas, which advocate for fiscal conservatism and reduced government overreach.

• HB 1514 (Same As)