Texas Senate Bill SB2478

Texas 2025 - 89th Regular

• Filed: 3/13/25

Caption

Relating to the vote required by the governing body of a political subdivision to adopt an ad valorem tax rate that exceeds the no-new-revenue tax rate or to authorize the issuance of tax bonds.

Impact

If this bill is enacted, it will have significant implications for tax legislation and local governance across Texas. With a requirement for 75 percent approval for significant fiscal measures, local government bodies will now face a higher threshold to adopt tax increases and approve bonding measures. This could potentially limit the capacity of local governments to address urgent community needs for funding essential services or infrastructure by constraining their financial options.

Summary

SB2478 proposes amendments to the Government Code and Tax Code regarding the voting requirements for political subdivisions in Texas. Specifically, the bill mandates that to adopt an ad valorem tax rate that exceeds the no-new-revenue tax rate, or to authorize the issuance of general obligation bonds, a supermajority vote of 75 percent of the governing body must be achieved. This bill is introduced with the intent to impose stricter checks on the ability of local governments to raise taxes and incur debt, thereby aiming to increase accountability and transparency in fiscal decisions made by these entities.

Contention

Notable points of contention surrounding SB2478 include concerns from some local officials and governing bodies who argue that such a high voting threshold may hinder necessary public projects and tax reforms. Critics assert that while the intent of ensuring fiscal responsibility is commendable, the practical effects could stifle needed investments in public services. Advocates for the bill, however, argue that it will prevent fiscal irresponsibility and the imposition of sudden tax increases on residents without broad support.

Further_details

The bill emphasizes transparency by demanding that any tax increase includes clear communication to the public about its implications. Specifically, tax units will need to articulate in official documents how the rates compare to previous years and the financial impact on the average homeowner. Such requirements are designed to keep the electorate informed and engaged in the local tax-making process.

Texas Constitutional Statutes Affected

Government Code

• Chapter 1253. General Obligation Bonds Issued By Political Subdivisions
  • Section: New Section

Tax Code

• Chapter 26. Assessment
  • Section: 05