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Texas Attorney General Ken Paxton Blocks More than 130 Cities From Raising Property Taxes

The cities were flagged for missing state audit and transparency rules under Senate Bill 1851, and more than 130 Texas cities face the same tax limit.

  • On Thursday, Texas Attorney General Ken Paxton issued formal warnings to over 130 Texas cities, including 12 in East Texas, prohibiting them from raising property taxes above the no-new-revenue rate due to non-compliance with state financial transparency requirements.
  • Senate Bill 1851, passed during the 2025 legislative session, mandates that cities complete annual financial audits and release financial statements to retain their authority to raise property taxes above the no-new-revenue level.
  • Paxton's office launched this probe last month, demanding documentation from over 1,000 municipalities to verify compliance, and identified more than 130 cities that reportedly failed to meet statutory reporting benchmarks for the current fiscal year.
  • Attorney General Paxton stated, "Cities cannot fail to abide by state audit requirements without consequences," as his office continues to aggressively enforce state law and the investigation remains ongoing with potential for additional enforcement actions.
  • While larger cities like Dallas and Houston faced earlier scrutiny, small municipalities have argued that the 180-day audit requirement disproportionately impacts their limited manpower and budgets, highlighting disparate compliance challenges across Texas.
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KYTX broke the news on Thursday, May 14, 2026.
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