Texas GOP's pro-gun law backfires — and ends up footing taxpayers with $500 million bill: study
Weapon series. Custom build AR-15 (M4A1) carbine on a wooden surface (Shutterstock)

A Texas law intended to benefit gun manufacturers has reportedly backfired and is costing taxpayers hundreds of millions of dollars in the form of higher interest payments.

The Houston Chronicle reports that Texas Republicans in recent years passed legislation that required banks to certify that they do not "discriminate" in their dealings with gun manufacturers as a precondition of doing business with Texas municipalities.

While the new rules were initially not projected to be costly to these municipalities, a new study by Federal Reserve economist Ivan Ivanov and University of Pennsylvania Finance Professor Daniel Garrett claims that local governments have already paid up to $500 million due to increased interest payments that are a direct result of the gun law.

The reason for this, explains Ivanov, is that the major banks have not complied with Texas legislators' demands on financing the gun industry, which has left municipalities with far fewer options when it comes to financing projects.

READ MORE: Dem spars with 'extremist' GOPer who says contraceptive rights cause abortions

"The more you were reliant on these banks, the more you were paying on subsequent offerings after those banks left," he explained.

Garrett tells the Houston Chronicle that many local governments likely got a shock when they found out banks they've worked with for years could not longer do business with them.

“The way it would manifest is when they reach out to their banker to see how much it's going to cost to, say, refinance the bonds they borrowed back in 2019, or something," he says. "Their banker is gonna say, Hey, I'm not in Texas anymore. And then when they call someone else, they're gonna get a bid that looks really high."

NOW WATCH: With his trial racing towards a verdict, Steve Bannon is floundering inside and outside of the courtroom

With his trial racing towards a verdict, Steve Bannon is floundering inside and outside of the court www.youtube.com