H.B. No. 5267 introduces new financial regulations for municipalities and counties in Texas by amending the Local Government Code to include Sections 140.014 and 140.015. Section 140.014 establishes a limit on annual expenditures for political subdivisions, stipulating that total expenditures from all available revenue sources in a fiscal year cannot exceed the greater of the previous year's total expenditures or an amount determined by applying a rate published annually by the Legislative Budget Board, which combines the population growth rate and inflation rate. Exceptions to this limit are provided if voters approve additional expenditures or if a state of disaster is declared by the governor, allowing for expenditures to exceed the set limits under specific conditions.

Section 140.015 mandates that municipalities and counties must provide a summary of their adopted and proposed budgets on their websites or make them publicly available. This summary must include the total budget amount, budgeted amounts for various categories (such as public safety and transportation), and a taxpayer impact statement detailing fees and property taxes for typical residential ratepayers. The provisions of these sections will apply to fiscal years beginning on or after December 1, 2025, and the act is set to take effect on September 1, 2025.

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