On September 29, 2025, the City of Whitesboro in North Texas approved a 51.2% increase in its total property tax rate, resulting in an unprecedented 61.6% tax increase for all properties.
This decision, made without a vote of approval by the people, drew immediate scrutiny from state Rep. Shelley Luther (R-Tom Bean), who filed a complaint with Texas Attorney General Ken Paxton alleging the city violated state auditing requirements.
Paxton’s office responded swiftly with a letter on October 2, 2025, launching an investigation and halting implementation of the new rate until compliance is verified. Under Senate Bill 1851, enacted during this year’s 89th Legislative Session and effective September 1, 2025, the Attorney General can prohibit municipalities from exceeding the no-new-revenue tax rate if they fail to meet auditing standards. Three other Texas cities received similar letters from the Office of Attorney General.
The complaint highlights two primary violations: insufficient annual audits of city records and accounts, and failure to publish notice of the budget hearing in a county newspaper, as mandated by Texas Local Government Code Sections 103.001 and 102.065, respectively. Municipalities must prepare and file audited financial statements, including the auditor’s opinion, in the office of the municipal secretary or clerk within 180 days of their fiscal year-end.
Paxton’s letter invokes the Texas Public Information Act, Chapter 552 of the Texas Government Code, to demand 10 specific categories of documents from the city. These include:
- Documents that demonstrate the city has had its records and accounts audited annually, pursuant to Texas law, from January 1, 2022 to present.
- Any and all drafts of the annual financial statement for the previous fiscal year; including initial and subsequently amended drafts.
- Communications related to the drafting process for the annual financial statement, including all communications related to non-finalized drafts and the finalized version of the annual financial statement.
- The finalized annual financial statement for the previous fiscal year, pursuant to Texas law.
- All recorded communications regarding the new tax rate.
- The minutes for the September 9, 2025, Whitesboro City Council meeting.
- The minutes for the September 29, 2025, Whitesboro City Council meeting.
- Documentation that explains or was otherwise used to justify the implementation of the 51.2% property tax increase.
- Any notice informing the public about the date, time, and location of a hearing on the new budget.
- Evidence that the city published notice of the date, time, and location of a hearing on the new budget in a newspaper of general circulation in the county.
The probe stems from the city’s fiscal year ending September 30, 2024, for which required filings were due by March 29, 2025, but were not submitted. Paxton noted that upon initial review, the city appeared non-compliant with auditing laws following its fiscal year that concluded on September 30, 2024.
Paxton stated in the letter, “Texas deserves government at all levels that understands the impact of taxes on economic prosperity and keeps dollars in taxpayers’ pockets. Burdensome tax increases are antithetical to the spirit that drives Texas.” He copied the request to Whitesboro Mayor Pro Tem Carla Woolsey and the city aldermen, urging full cooperation.
This case highlights the ongoing conflict between local governments seeking revenue growth to fuel new spending, and state laws designed to protect taxpayers through transparency and accountability. Similar disputes are underway in other Texas municipalities, where tax hikes have outpaced inflation and population growth without adequate justification or public input.
Texans for Fiscal Responsibility applauds Attorney General Paxton’s urgency and enforcement of Senate Bill 1851 and commends Rep. Luther’s leadership in standing up for her constituents against unjust tax increases.
Every city in Texas should conduct transparent audits and give the public ample notice before considering any tax increases. As always, we encourage residents to stay engaged, review local budgets, attend public hearings, and reach out to their elected officials to demand fiscal discipline in every area of government.
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