Texas Attorney General Ken Paxton on Monday notified more than 110 Texas cities that they are prohibited from adopting ad valorem tax rates above the no-new-revenue tax rate.
The action stems from the cities’ failure to meet state financial statement audit and transparency requirements under Senate Bill 1851.
The letters follow Paxton’s investigation of more than 1,000 Texas municipalities. In May, his office sent similar notifications to more than 130 other cities. The investigation remains ongoing.
SB 1851 Requirements and Enforcement Criteria
During the 2025 legislative session, the Texas Legislature passed SB 1851, which took effect September 1, 2025. The law amends the Local Government Code to require municipalities to audit their records and accounts annually and to prepare a financial statement based on that audit. Cities must file the financial statement and the auditor’s opinion with the municipal secretary or clerk within 180 days after the end of the fiscal year.
If the attorney general determines that a municipality has not complied, the city may not adopt an ad valorem tax rate that exceeds its no-new-revenue tax rate for the tax year beginning on or after the determination date, or for subsequent tax years until the city completes the required audit and filing.
Paxton’s office requested documents from more than 1,000 municipalities to assess compliance. The more than 110 cities receiving the latest letters were those identified as noncompliant with the statutory audit and transparency requirements. Other cities were not included because they either met the requirements or determinations had not yet been made in the ongoing review.
List of Cities Receiving Violation Determination Letters
According to the Office of the Attorney General, the following cities received the letters:
Adrian, Annona, Aransas Pass, Avery, Blackwell, Blossom, Bogata, Bonney, Brazoria, Brownsboro, Charlotte, China, Clifton, Clint, Cottonwood Shores, Cotulla, Cranfills Gap, Cresson, Cumby, Darrouzett, Detroit, Dickens, Dish, Edgecliff Village, Electra, Florence, Friona, Gallatin, Godley, Goldthwaite, Goodlow, Goodrich, Gorman, Grand Saline, Granger, Greenville, Gruver, Hallsburg, Hallsville, Hawk Cove, Hawkins, Hawley, Hereford, Hilshire Village, Hudson, Indian Lake, Ingram, Itasca, Ivanhoe, Jones Creek, Kempner, Kendleton, Kennard, Kingsbury, Kress, La Villa, Ladonia, Linden, Log Cabin, Lone Star, Lyford, Mason, Mathis, Mission, Moody, Morgan, Munday, New London, Newton, Nordheim, Oakwood, Odem, Oglesby, Overton, Palacios, Pasadena, Pattison, Peaster, Penitas, Pine Forest, Point Comfort, Port Isabel, Presidio, Rancho Viejo, Rice, Robinson, Roman Forest, Round Mountain, Round Top, San Leanna, Sanford, Santa Fe, Seadrift, Simonton, Spearman, Springlake, Stockdale, Stockton Bend, Stratford, Strawn, Sunset Valley, Taylor Landing, Throckmorton, Toyah, Trinidad, Tulia, Uhland, Vega, Vinton, Weimar, Winfield, Winnsboro, Woodcreek, Woodsboro, Wortham, and Yorktown.
What the Prohibition Means
The no-new-revenue tax rate is the rate that would generate approximately the same amount of property tax revenue as the prior year from properties taxed in both years, after adjustments for lost and new property. Cities subject to the determination may not adopt a higher rate until they come into compliance with the audit and filing requirements.
“I am continuing to fight to stop cities from unlawfully raising taxes on hardworking Texans,” Paxton said in a statement. “My office has been investigating cities across Texas. Now, over 110 new cities have been notified that they must not raise property taxes in violation of state law. I will continue to make sure that taxpayers are protected from unlawful tax increases.”
Property Tax Trends and Existing Limits
Texas does not levy a state property tax. Local entities—cities, counties, school districts, and special districts—set rates. Statewide property tax levies rose from approximately $51.2 billion in 2015 to $89.4 billion in 2025, according to Texas Comptroller data compiled by Texas Policy Research. City property tax levies specifically increased from about $8.0 billion in 2015 to $16.7 billion in 2025.
Texas law already limits most cities and counties. The voter-approval tax rate generally allows revenue growth of up to 3.5% above the no-new-revenue maintenance and operations rate (plus debt service and any unused increment) without an election. Exceeding that threshold typically requires voter approval.
Paxton’s office stated the investigation continues and additional determinations may follow as more cities are reviewed for compliance with SB 1851.
Provided by Dallas Express
