On Monday, Texas Attorney General Ken Paxton sent formal letters to 110+ cities across the state informing them that they are prohibited from adopting ad valorem tax rates higher than the no‑new‑revenue rate. The restriction remains in place for the tax year beginning after the determination date and for any subsequent years until each municipality completes the required annual audit and files a financial statement with the municipal secretary or clerk.
Why the letters were issued
Senate Bill 1851, enacted during the 2025 legislative session, amended the Local Government Code to require every Texas municipality to conduct an annual audit, prepare a financial statement based on that audit, and file both the statement and the auditor’s opinion within 180 days of the fiscal year’s end. The law is intended to increase fiscal transparency and ensure that local governments are accountable for how they raise revenue.
Compliance process and consequences
If the Attorney General’s office determines that a city has failed to meet these audit and filing requirements, the city may not adopt a property‑tax rate that exceeds its no‑new‑revenue rate. The no‑new‑revenue rate is calculated to generate roughly the same amount of property‑tax revenue as the prior year, after adjusting for lost and new property. Cities must remain at or below that rate until they become compliant.
Cities receiving the latest notices
The most recent round of letters includes the following municipalities: 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.
Statewide tax context
Texas does not levy a state property tax; local entities—cities, counties, school districts, and special districts—set rates. According to Texas Comptroller data compiled by Texas Policy Research, statewide property‑tax levies grew from about $51.2 billion in 2015 to $89.4 billion in 2025. City‑level levies alone increased from roughly $8.0 billion to $16.7 billion over the same period.
Attorney General’s statement
“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.”
Next steps
Paxton’s office indicated that the investigation of more than 1,000 municipalities is ongoing. Additional determinations may be issued as the review of compliance with SB 1851 continues. Cities that receive a determination are encouraged to complete the required audit and filing promptly so they can resume normal tax‑rate setting without state‑imposed limits.
Original reporting: The Dallas Express — read the source article.
