Overview
- Paxton’s office, which sent violation letters Thursday, told the named cities they cannot set property tax rates above the no-new-revenue level.
- The no-new-revenue rate is the tax rate that would bring in the same total dollars as last year, not counting value from new construction or improvements.
- SB 1851, passed in 2025, requires an annual audit and a published financial statement within 180 days before any city can collect more than last year’s property tax revenue.
- The attorney general reviewed records from over 1,000 municipalities and said the list is an initial set, with more cities possible as the investigation continues.
- Most cities cited are small or rural, while larger cities reviewed early in the probe such as Houston, Dallas and Fort Worth are not on the barred list, raising concerns that smaller towns with thin staff could face service cuts if revenues cannot grow.