Paxton Targets Over 130 Cities On Tax Transparency Issues
May 15, 2026 – AUSTIN, Texas — Ken Paxton has issued formal notices to more than 130 Texas cities, warning them they are prohibited from increasing property taxes above the no-new-revenue rate after failing to meet state transparency and audit requirements.
The enforcement action follows a sweeping investigation led by the Office of the Attorney General, which reviewed over 1,000 municipalities across Texas. The probe aimed to ensure compliance with Senate Bill 1851, a law passed during the 2025 legislative session that ties a city’s ability to raise property taxes to its adherence to strict financial reporting and audit standards.
Under SB 1851, cities that do not complete required financial statement audits or fail to provide adequate transparency to taxpayers are barred from adopting tax rates that exceed the no-new-revenue threshold. According to the Attorney General’s office, more than 130 cities were found to be out of compliance for the upcoming fiscal year.
Paxton’s letters notify those municipalities that enforcement provisions and potential penalties are now in effect. The cities are prohibited from approving higher ad valorem tax rates until they meet the law’s requirements. Officials emphasized that the current list represents only an initial group, with further determinations expected as the statewide investigation continues.
“I will not allow cities to unlawfully raise taxes on hardworking Texans,” Paxton said in a statement. “Cities cannot fail to abide by state audit requirements without consequences.”
The list of flagged cities spans the state, including communities such as Alpine, Big Spring, Crystal City, Eagle Lake, Livingston, Port Lavaca, Snyder, Texas City, Victoria, and Weslaco, among many others. Some are small rural towns, while others are larger regional hubs, highlighting the broad scope of the compliance issue.
The Attorney General’s office indicated it will continue reviewing municipal records and may take additional action against cities found to be in violation. Local governments are expected to correct deficiencies in their financial reporting if they wish to regain the ability to raise property tax revenues.
The move underscores growing state scrutiny over local taxation practices and signals stricter enforcement of transparency laws affecting Texas taxpayers.
The following list of cities have been sent violation determination letters: Alpine, Aspermont, Baird, Balch Springs, Balmorhea, Bedias, Berryville, Big Spring, Bishop, Blooming Grove, Blue Mound, Briarcliff, Brookside Village, Buffalo Gap, Calvert, Cameron, Campbell, Centerville, Chico, Chireno, Clarksville, Clear Lake Shores, Combine, Corrigan, Crane, Cross Timber, Crowell, Crystal City, Cuero, Dalhart, Danbury, De Leon, Eagle Lake, Elkhart, Eureka, Eustace, Fairfield, Farwell, Flatonia, Franklin, Fritch, Fulton, Gordon, Grandfalls, Gregory, Groesbeck, Groom, Hale Center, Hamilton, Hearne, Hempstead, Higgins, Hillcrest Village, Horizon City, Howardwick, Howe, Huntington, Industry, Ingleside On the Bay, Jewett, Jonestown, Keene, Kemah, Kenedy, Kerens, Kermit, Lamesa, Livingston, Lott, Lumberton, Manvel, Marquez, McCamey, Megargel, Menard, Mertzon, Mexia, Miami, Midway, Miles, Mount Enterprise, Natalia, New Home, New Waverly, Newcastle, Oyster Creek, Paducah, Panorama Village, Pelican Bay, Pleak Village, Plum Grove, Port Lavaca, Quanah, Red Lick, Redwater, Rockdale, Rocksprings, Roma, Rusk, San Elizario, San Felipe, San Perlita, Seabrook, Shepherd, Smiley, Snyder, Somerville, Southmayd, Spring Branch, Spur, Sterling City, Stinnett, Sunray, Surfside Beach, Taft, Tehuacana, Texas City, Texline, Three Rivers, Tiki Island, Tom Bean, Tool, Turkey, Valley Mills, Valley View, Victoria, Weslaco, Weston Lakes, Wharton, Wickett, Wimberley, Wolfe City, Woodloch, Yantis, and Yoakum.
