More than 130 Texas cities have been barred from raising property taxes after the Texas Attorney General’s Office determined they failed to meet state financial audit and transparency requirements.
What was the cause of action?
This action stems from the Texas Legislature’s passage of Senate Bill 1851 in 2025, which prevents cities from raising property taxes above the no-new-revenue rate unless they meet certain requirements.
The investigation was launched in December 2025, when Texas Attorney General Ken Paxton announced that his office was reviewing more than 1,000 Texas cities – including Houston, Dallas and San Antonio – to determine whether they were complying with the law.
In April 2026, Paxton’s office demanded documents from more than 1,000 Texas cities to ensure compliance.
On May 14, Paxton’s office announced that more than 130 Texas cities had failed to comply with statutory requirements for the new fiscal year barring them from raising property taxes above the no-new-revenue tax rate.
Paxton’s office noted that the letters he sent were for a preliminary list of non-compliant cities and that the investigation is ongoing.
“I will not allow cities to illegally raise taxes on hardworking Texans. That’s why I took aggressive action against more than 130 Texas cities to hold them accountable and ensure they comply with state law,” Paxton said in a statement. “Cities cannot fail to comply with state audit requirements without consequences. My office will continue to aggressively enforce Texas law to protect taxpayers across the state.”
Which cities in Texas are affected?
Here’s a list of Texas cities affected by the investigation, broken down by region.
North Texas
- balch springs
- blue mound
- chico
- Mix
- cross timber
- gordon
- Hillcrest Village
- happen
- keen
- Pelican Bay
- Southmead
- tom bean
- valley view
- campbell
- eustace
- wolf city
- newcastle
- berryville
- Yantis
East Texas
- chireno
- corrigan
- elkhart
- huntington
- livingston
- Mount Enterprise
- New Waverly
- dry bread
- shepherd
- woodloch
northeast texas
- Clarksville
- lick red
- red water
central texas
- Baird
- Blooming Grove
- buffalo gap
- Calvert
- cameroon
- de leon
- eureka
- grosbeak
- hamilton
- hearne
- Jewett
- Karens
- roll
- Marquez
- Mexia
- rockdale
- tehuacana
- Valley Mills
- miles
Brazos Valley
- badass
- Centre Ville
- fairfield
- franklin
- Midway
Gulf Coast/Houston area
- Brookside Village
- clear lake shore
- danbury
- Eagle Lake
- Hempstead
- kemah
- Manvel
- oyster creek
- Panorama Village
- Plik Village
- Plum Grove
- San Felipe
- Seabrook
- Surfside Beach
- texas city
- tiki island
- Weston Lakes
- Wharton
coastal bend
- bishop
- Fulton
- gregory
- Ingleside on the Bay
- Port Lavaca
- taft
Rio Grande Valley/South Texas Border
- Roma
- san perlita
- Weslaco
- crystal city
- Natalia
South Texas (inland)
- kennedy
- smiley
- three rivers
- cuero
- yoakum
- Somerville
- Industry
texas panhandle
- dalhart
- Fritch
- Groom
- higgins
- miami
- Stinnett
- sunray
- texline
- turkey
- Howardwick
South Plains/Llano Estacado
- Hale Center
- Lamesa
- new house
- Farwell
- snyder
rolling plains
- Aspermont
- Crowell
- megaargel
- paduka
- quanah
- Inspiration
West Texas/Permian Basin and Trans-Pecos
- alpine
- Balmoria
- big spring
- crane
- Grandfalls
- kermit
- mccamy
- Mertzon
- sterling city
- Wicket
- horizon city
- San Elizario
Concho Valley and Hill Country
- maynard
- rocksprings
- briarcliff
- jonestown
- spring branch
- wimberley
southeast texas
Victoria/South-Central Bay
Mateo Rosailes is a Texas Connect reporter for USA TODAY and its regional papers in Texas.