Attorney General Ken Paxton has blocked more than 130 Texas cities from raising property taxes.
The cities failed to comply with Senate Bill 1851, which requires annual financial audits and transparency.
SB 1851 bars cities from raising property taxes above the "no-new-revenue" level if they don't meet state requirements.
Paxton's office investigated over 1,000 municipalities to verify compliance.
Non-compliant cities face enforcement provisions and penalties under the new law.
Why this matters: This enforcement action impacts numerous small cities that claim the audit requirements disproportionately affect them due to limited resources. It also highlights the ongoing tension between state oversight and local governance in Texas.
Texas Attorney General Ken Paxton has taken a firm stance against cities that fail to meet the financial audit and transparency requirements outlined in Senate Bill 1851. This law, passed in 2025, is designed to prevent cities from unduly raising property taxes without proper financial accountability.
The attorney general’s office initiated a sweeping investigation, requesting financial documents from over 1,000 municipalities. The probe identified more than 130 cities that did not comply with the new law. These cities have been formally notified that they are prohibited from raising property taxes above the "no-new-revenue" level, which is the rate required to collect the same amount of taxes as the previous year.
Cities like Alpine, Balch Springs, Victoria, and Wimberley are among those affected. Many small cities argue that the audit provisions disproportionately impact them because they lack the resources to produce audits within the 180-day requirement. The penalties for non-compliance could further strain their already limited budgets.
Larger cities, including Houston, Dallas, Fort Worth, and Corpus Christi, were initially part of Paxton’s tax probe but are not on the list of cities currently barred from raising taxes. This suggests that these larger municipalities have either complied with the law or provided sufficient documentation to justify their tax rates.
External link to The Texas Tribune article on SB 1851 for more information.
Q: What is Senate Bill 1851?
Senate Bill 1851 is a Texas law that prevents cities from raising property taxes above the "no-new-revenue" level if they do not meet state financial audit and transparency requirements.
Q: What happens if a city doesn't comply with SB 1851?
Non-compliant cities are barred from adopting tax rates above the "no-new-revenue" level until they provide the required financial reports.
Q: How many cities are affected by this enforcement action?
As of May 2026, more than 130 Texas cities are affected, and the investigation is ongoing.
Q: What should a city do if they receive a violation determination letter?
Contact the Attorney General’s Office and provide the necessary documentation to prove compliance with SB 1851.
Compliance is Key:: Cities must adhere to state financial audit and transparency requirements to avoid penalties.
Resource Impact:: Small cities may face disproportionate challenges in meeting these requirements due to limited resources.
Taxpayer Protection:: The enforcement action aims to protect taxpayers from unlawful tax increases.
Ongoing Investigation:: More cities could be added to the non-compliant list as the review continues.
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