Texas’ Wall Street Showdown Costing Cities Hundreds of Millions

Texas taxpayers are footing the bill for the state’s war with Wall Street over guns.

The state’s municipal borrowers have been hit with as much as $532 million of extra debt costs because of a new GOP law that’s led some banks to step back from Texas’s bond market. That’s the conclusion of a new paper by Daniel Garrett, a University of Pennsylvania professor, and Ivan Ivanov, a principal economist at the Federal Reserve.

The researchers examined sales in Texas’s $50-billion-a-year municipal-bond market after a law took effect in September that targeted banks for their gun policies.

The ...