AUSTIN, Texas (KXXV) — Texas Attorney General Ken Paxton has prohibited more than 130 cities from raising property taxes above the no-new-revenue rate after determining they failed to meet state audit and transparency requirements. Several of the cities are in Central Texas.
The action follows Paxton's investigation of over 1,000 Texas municipalities to ensure compliance with SB 1851, a law enacted during the 2025 legislative session that bars cities from raising property taxes above the no-new-revenue rate if they don't meet financial statement audit and transparency requirements.
"I will not allow cities to unlawfully raise taxes on hardworking Texans," Paxton said in a statement.
The attorney general's office said the investigation remains ongoing and additional action may be taken as more cities are found to be out of compliance.
Among the cities receiving violation determination letters are several in Central Texas, including Centerville, Fairfield, Franklin, Groesbeck, Hearne, Jewett, Lott, Mexia, Rockdale, Somerville, and Valley Mills.
The no-new-revenue tax rate is the rate that would generate the same amount of property tax revenue as the previous year, excluding revenue from new construction and improvements.
Under SB 1851, cities that fail to meet audit and transparency requirements are subject to enforcement provisions and penalties and may not adopt property tax increases above the no-new-revenue rate.
