🟡Relating to the penalty for noncompliance with certain audit requirements by a municipality.

🟡 SB 1851: Cities lose tax power if audits late

What it says it does:
SB 1851 requires cities to complete and file their annual audit within 180 days after their fiscal year. If they fail, the Attorney General can step in after a complaint and restrict the city’s ability to raise property taxes.

What it actually changes:
The bill ties compliance with audit deadlines to property tax authority. A city found out of compliance cannot set a tax rate higher than the no new revenue rate until it cures the deficiency. The restriction continues into future years until the audit is filed.

Who is pushing for it:
Supporters in the files include the Texas Public Policy Foundation, Texas Association of Builders, and the Mayor of Chandler.

Who benefits:
Taxpayer advocacy groups gain a new enforcement tool against cities they see as unaccountable. Builders may gain indirectly from cities being forced to hold tax rates flat. State officials get stronger leverage over municipal finances.

Who gets left out or exposed:
Cities that struggle to secure auditors or meet deadlines risk losing revenue flexibility, even when acting in good faith. Residents of those cities may face cutbacks in police, fire, road, or water services if rates cannot be adjusted.

Why this matters long term:
The bill sets a precedent that state officials can tie core local powers to compliance rulings. Over time, this could expand beyond audits to other filings or conditions, reshaping local autonomy.

What to watch next:
How the Attorney General defines noncompliance, how quickly determinations are made, and whether a lack of appeals or cure periods causes hardship for smaller cities.

Bottom line:
The bill enforces transparency through audits but does so by centralizing control at the state level. It strengthens oversight but risks selective enforcement and reduced local flexibility.

#SB1851 #TexasPolicy #WatchTheRules #TexasTaxes #LocalControl #MunicipalFinance