Texas Attorney General Bars 110+ More Cities From Raising Property Tax Rates Above the No-New-Revenue Rate

What Changed, and When

On August 17, 2026, the Office of the Attorney General (OAG) announced that it had sent letters to more than 110 Texas cities notifying them that they are prohibited from raising ad valorem (property) taxes above the no-new-revenue tax rate. The letters are described by the office as violation determination letters issued under Senate Bill 1851 of the 89th Texas Legislature.

According to the OAG announcement and reporting by Texas Scorecard, the sequence has been:

• 2025 legislative session. SB 1851 was passed and enacted. It limits a noncompliant municipality’s authority to raise ad valorem taxes above the no-new-revenue rate.
• April 2026. The OAG requested documents from more than 1,000 Texas municipalities as part of a statewide review of compliance with SB 1851.
• May 2026. The office notified more than 130 cities that they had been found noncompliant and were subject to the restriction.
• August 17, 2026. More than 110 additional cities received violation determination letters. The OAG states that the investigation remains ongoing and that further determinations may follow.

Attorney General Ken Paxton is quoted in the announcement as saying: “I am continuing to fight to stop cities from unlawfully raising taxes on hardworking Texans. My office has been investigating cities across Texas. Now, over 110 new cities have been notified that they must not raise property taxes in violation of state law.”

As reported, SB 1851 requires a municipality to have its records and accounts audited annually, to prepare an annual financial statement based on that audit, and to file that statement together with the auditor’s opinion with the municipal secretary or clerk within 180 days of the end of the city’s fiscal year. Where the attorney general determines that a city did not meet those requirements, the city may not adopt a property tax rate above its no-new-revenue rate for the tax year beginning after the determination, and the restriction continues in later tax years until the city completes the audit and prepares or files the required documents.

Who in Texas This Reaches

The cities named in the August 17, 2026 announcement span every region of the state — the Panhandle and West Texas, East Texas, the Hill Country, the Gulf Coast, the Rio Grande Valley, and suburbs inside the major metros. According to the OAG, the following cities were sent violation determination letters:

Adrian, Annona, Aransas Pass, Avery, Blackwell, Blossom, Bogata, Bonney, Brazoria, Brownsboro, Charlotte, China, Clifton, Clint, Cottonwood Shores, Cotulla, Cranfills Gap, Cresson, Cumby, Darrouzett, Detroit, Dickens, Dish, Edgecliff Village, Electra, Florence, Friona, Gallatin, Godley, Goldthwaite, Goodlow, Goodrich, Gorman, Grand Saline, Granger, Greenville, Gruver, Hallsburg, Hallsville, Hawk Cove, Hawkins, Hawley, Hereford, Hilshire Village, Hudson, Indian Lake, Ingram, Itasca, Ivanhoe, Jones Creek, Kempner, Kendleton, Kennard, Kingsbury, Kress, La Villa, Ladonia, Linden, Log Cabin, Lone Star, Lyford, Mason, Mathis, Mission, Moody, Morgan, Munday, New London, Newton, Nordheim, Oakwood, Odem, Oglesby, Overton, Palacios, Pasadena, Pattison, Peaster, Penitas, Pine Forest, Point Comfort, Port Isabel, Presidio, Rancho Viejo, Rice, Robinson, Roman Forest, Round Mountain, Round Top, San Leanna, Sanford, Santa Fe, Seadrift, Simonton, Spearman, Springlake, Stockdale, Stockton Bend, Stratford, Strawn, Sunset Valley, Taylor Landing, Throckmorton, Toyah, Trinidad, Tulia, Uhland, Vega, Vinton, Weimar, Winfield, Winnsboro, Woodcreek, Woodsboro, Wortham, and Yorktown.

A separate group of more than 130 cities received the same kind of notice in May 2026; that earlier list is published in the OAG’s May announcement.

The timing matters because it lands in the middle of budget season. The Texas Tribune reported on the same day that Texas cities are weighing property tax increases and spending cuts as they close budget gaps for the coming fiscal year.

What This Changes Legally

• The no-new-revenue rate is a defined figure, not an opinion. It is calculated under Chapter 26 of the Texas Tax Code and is designed to generally produce about the same amount of property tax revenue from property taxed in both years, leaving out newly added property. The Texas Comptroller publishes the Truth-in-Taxation materials that explain how it is calculated and posted.
• A determination has a ceiling effect on the city, not on the appraisal district. The restriction described by the OAG limits the rate a named city may adopt. Property values are set separately by the county appraisal district, and a tax bill reflects both the appraised value and the rates adopted by every taxing unit that covers the property — city, county, school district, and any special districts.
• It is a compliance restriction that can be lifted. As reported, the limitation stays in place until the city completes the audit and prepares or files the required financial statement.
• Other taxing units are unaffected by these letters. A property owner in a named city may still see a tax bill rise if the county, school district, or a special district adopts a higher rate, or if the appraised value went up.
• The investigation is ongoing. The OAG states that additional cities could receive violation determinations.

Nothing above decides any particular tax bill or any particular city’s status. Whether a specific rate adoption complied with the Tax Code, and what follows if it did not, are questions that turn on that city’s records and that property’s file.

What Kind of Option Might Apply

This page is information, not legal advice, and it is not a prediction about any case. What a lawyer can review includes:

• For a homeowner: a tax attorney can read the tax statement and the appraisal notice, identify each taxing unit and rate on the bill, explain the protest and appeal path through the appraisal review board, and describe the deadlines that apply to the property.
• For a business or commercial property owner: a tax attorney can review the appraised value, any exemption or special appraisal that may be relevant, and how a rate adopted in a named city interacts with the rest of the bill.
• For a buyer or seller mid-transaction: a real estate lawyer can review how taxes are being prorated at closing and what the contract says about a rate or value that has not been finalized.
• For a landowner or developer: a lawyer can review the notices a taxing unit is required to publish before adopting a rate, and what records are publicly available about a city’s audit status.

Why Acting Quickly Can Matter

Property tax deadlines in Texas are short and they are calendar-driven. Appraisal notices, protest deadlines with the appraisal review board, appeals from an appraisal review board order, and the public hearings that precede a city’s rate adoption all run on fixed dates set by the Tax Code, and cities adopt their rates for the year in late summer and early fall. Records such as appraisal notices, hearing notices, closing statements, and prior-year tax statements are easiest to gather while they are recent. It is best to talk with a lawyer early, while the widest range of options is still open, rather than after a deadline has passed.

Sources

1. Office of the Attorney General of Texas, Attorney General Ken Paxton Sends Letters Prohibiting More Than 110 Cities from Illegally Raising Taxes on Texans (news release, August 17, 2026 — primary source).
2. Office of the Attorney General of Texas, earlier announcement covering more than 130 cities (May 2026).
3. Texas Legislature, Senate Bill 1851, 89th Legislature, Regular Session — enrolled text (PDF).
4. Texas Tax Code, Chapter 26 (Assessment), which sets out the no-new-revenue rate calculation.
5. Texas Comptroller of Public Accounts, Truth-in-Taxation.
6. Texas Scorecard, Paxton Bars More Than 110 Cities From Raising Taxes Over Audit Failures (August 17, 2026).
7. The Texas Tribune, Texas cities eye property tax hikes, spending cuts amid yawning budget gaps (August 17, 2026).
8. Texas Local Government Code, Chapter 103 (Municipal Audits and Financial Statements).