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Bill

SB 2842

Relating to prohibiting a school district from using interest and sinking tax revenue to pay for deferred maintenance.

89th Legislature (2025) Introduced by Adam Hinojosa

Texas bill prohibits school districts from redirecting bond debt-service tax revenue to pay for deferred maintenance, limiting maintenance funding flexibility.

Referred to Education K-16
#bonds(s6060) #education--primary&secondary--facilities(i0241) #education--primary&secondary--finance(i0250) #education--schooldistricts(i0220)
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Bill Summary · SB 2842

Legislative bill overview

SB 2842 would prohibit Texas school districts from using interest and sinking (I&S) fund revenues to pay for deferred maintenance costs. Interest and sinking funds are tax revenues specifically designated for debt service on school bonds. The bill restricts these dedicated funds to their original purpose rather than allowing them to be redirected toward maintenance backlogs.

Why is this important

Many Texas school districts face significant deferred maintenance backlogs (repairs and upkeep delayed due to budget constraints). This bill would eliminate a potential funding source districts currently use to address these issues, forcing them to find alternative revenue or prioritize differently. The restriction could impact schools' ability to maintain facilities, though it protects the bond funding structure that taxpayers approved for specific debt obligations.

Potential points of contention

  • Fiscal impact on school maintenance: Restricting I&S fund flexibility may worsen deferred maintenance problems in districts already facing budget pressures, potentially affecting building safety and learning conditions
  • Bond investor confidence: Strict protection of I&S funds ensures bond obligations are met, which could support favorable borrowing rates, but the practical effect depends on current district practices
  • Equity concerns: Districts with limited alternative funding sources may be disproportionately affected compared to wealthier districts with greater revenue flexibility

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

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