AG Paxton Launches Statewide Review of Nearly 1,000 Cities for Possible Illegal Tax Increases

Texas Attorney General Ken Paxton has launched a sweeping statewide review of nearly 1,000 Texas cities — an effort to determine whether local governments are following long-standing financial audit requirements and whether any municipalities have unlawfully raised taxes above the state-mandated no-new-revenue rate.

The initiative stems from SB 1851, a new Texas law that prohibits cities from increasing taxes if they fail to meet state transparency and audit standards. Paxton has already ordered cities such as La Marque, Odessa, Tom Bean, and Whitesboro to halt proposed tax increases after finding compliance issues.

Paxton said the review is expanding rapidly after investigators discovered that “cities across the state routinely fail to comply with these long-standing requirements.”

“Local officials will not be allowed to ignore the law, cover up their finances, and burden Texans with never-ending tax increases,” Paxton said.

Major cities including Houston, San Antonio, Dallas, Fort Worth, Beaumont, Corpus Christi, Lubbock, Amarillo, El Paso, Waco, and Tyler are already part of the review.

What This Means for East Texas

While the Attorney General has not publicly listed every city involved, the scope suggests that small and mid-sized municipalities — including those in Jasper, Newton, and Tyler counties — could also receive document requests. Cities that raise taxes without proper audits risk legal action or being ordered to roll back their rates.

Concerned Residents Can Submit Complaints

The Attorney General’s office has launched an online complaint form for Texans who believe their city has violated SB 1851’s financial audit requirements.