Texas House Bill HB178

Texas 2025 - 89th 2nd C.S.

• Filed: 8/15/25

Caption

Relating to efficiency audits for certain political subdivisions.

Impact

The bill would significantly affect local governance by imposing a requirement for efficiency audits in scenarios where tax rates exceed specified thresholds. This could lead to enhanced scrutiny of local government spending and instigate measures aimed at improving fiscal responsibility. The requirement for audits to be independent and the necessity for results to be publicly disclosed would foster transparency, allowing constituents to better understand how their tax dollars are being managed.

Summary

House Bill 178 aims to implement efficiency audits for political subdivisions defined as taxing units in Texas. The bill mandates that any political subdivision that adopts an ad valorem tax rate exceeding the no-new-revenue tax rate for five consecutive tax years must conduct an efficiency audit. This provision is intended to ensure a thorough evaluation of fiscal management and resource utilization within these subdivisions, ultimately aiming to promote better financial practices and accountability in government operations.

Contention

While proponents of HB 178 argue that efficiency audits will enforce accountability and responsible financial management among political subdivisions, critics may view this mandate as an unnecessary burden. There may be concerns regarding the financial implications of conducting these audits, especially for smaller entities that could find the costs challenging to manage. Additionally, the requirement for audits in disaster areas under temporary provisions may also lead to disputes over the practicalities of implementation during recovery periods.

Texas Constitutional Statutes Affected

Local Government Code

• Chapter 140. Miscellaneous Financial Provisions Affecting Municipalities, Counties, And Other Local Governments
  • Section: New Section