Relating to a limit on local government expenditures.

HB 3537 would limit annual spending by Texas local governments (cities, counties, and special districts) to either the previous year's total expenditures or a slightly adjusted amount based on population growth and inflation. The adjustment rate - calculated annually by the Legislative Budget Board using the state's population growth and inflation data - would determine the maximum allowable spending increase. Local governments could exceed this limit only if voters approve additional spending through a special election. Exempt from the limit are bond proceeds approved by voters and grants, donations, or gifts. The law would apply to fiscal years beginning on or after December 1, 2025.