AG’s office releases initial list of cities in violation of ad valorem tax law

AUSTIN – The state attorney general’s office recently sent letters to more than 130 Texas cities notifying them they are prohibited from raising ad valorem taxes above the no-new-revenue tax rate. None of Ellis County’s municipalities were on this first listing, which stems from the office’s ongoing investigation of more than 1,000 Texas cities “to ensure none are unlawfully raising taxes,” according to a media release.

There are more than 1,200 municipalities in the state, and it is unclear from the release whether every single municipality is being reviewed. The office’s investigation stems from the 2025 legislative session’s passage of SB 1851, which bars cities from raising property taxes above the no-new-revenue rate if they do not meet the state’s financial statement audit and transparency requirements.

The state attorney general’s office has notified the initial cities identified that they are subject to the enforcement provisions and penalties established under SB 1851.