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Bill

HB 114

Relating to a prohibition on the guarantee of public school bonds.

89th Legislature, 2nd Called Session (2025) Introduced by Brian Harrison

Texas bill eliminating state guarantees on public school bonds, likely increasing borrowing costs for district capital projects and infrastructure financing.

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#bonds(s6060) #education--primary&secondary--finance(i0250)
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Bill Summary · HB 114

Legislative bill overview

HB 114 would prohibit the state of Texas from guaranteeing bonds issued by public school districts, eliminating a financial backing mechanism that currently exists. This removes state credit support for school bond issuances, potentially affecting how districts finance construction and infrastructure projects.

Why is this important

Public school bond guarantees lower borrowing costs for districts because lenders view state-backed debt as lower risk. Removing this guarantee would likely increase interest rates schools pay when borrowing for buildings, technology, and facilities—ultimately affecting taxpayers through higher debt service costs or reducing the capital projects schools can afford to undertake.

Potential points of contention

  • Fiscal impact on school districts: Schools in weaker financial positions or rural areas may face significantly higher borrowing costs without state backing, potentially widening infrastructure disparities
  • State liability reduction vs. education funding: Supporters may argue this reduces state exposure to debt risk, while opponents contend it effectively reduces state support for public education
  • Market effects: The change could affect Texas's overall bond market reputation and other entities' borrowing costs if it signals reduced state commitment to public institutions

Compiled from official sources — confirm details with the bill’s official record.

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