Last week’s story regarding this issue mistakenly reported that City Administrator Phil Harris had not responded for comment as of press time. Actually Harris’ responses had been sent via email but were undetected in a sub-folder. The News-Record sincerely apologizes for the accidental oversight. The online version of the article was corrected immediately and this article highlights his responses to Attorney General Paxton’s letter of investigation. We thank City leaders for responding to our questions and providing more information to our readers.
On Thursday, Oct. 2, just three days after the Whitesboro City Council adopted an increased property tax rate of $0.585800 per $100 valuation, Texas Attorney General Ken Paxton contacted the City Council to demand a freeze to the tax increase while he conducts an investigation into the legality of the Council’s decision.
The concern is regarding whether the City of Whitesboro completed and filed their most recent audit within 180 days of the last day of the fiscal year.
A new Senate Bill (SB1851) passed on Sept. 1 deems that any city which has failed to do so must adopt a no-new-revenue tax rate.
In a letter sent to the members of the City Council and the City Secretary, Paxton wrote that he “received a complaint from Representative Shelley Luther alleging that the City of Whitesboro was non-compliant with Texas auditing requirements” and that the city allegedly “failed to publish notice of its budget hearing in a county newspaper, as required by law.”
As a result, the Attorney General is formally launching an investigation into the City of Whitesboro to determine whether the new tax rate is illegal.
“Furthermore,” his letter continued, “I am demanding that the new tax rate not be implemented until I complete my investigation.”
When asked how the City plans to respond to Paxton’s requests and how the Attorney General’s letter will impact Whitesboro citizens, City Administrator Phil Harris said that while the City has no official statement regarding the AG’s letter beyond what has been stated previously, the City of Whitesboro holds that the law is not retrospective and that the City was in compliance prior to the enactment of the law on Sept. 1, 2025.
Harris confirmed that the City is in discussions with attorneys to evaluate the Attorney General’s “demand” of a tax rate freeze and the City’s appropriate response. The City is also in discussions with the Grayson County Tax Assessor to understand the impacts of the Attorney General’s letter on the citizens of Whitesboro, but no decision has been reached at this time.
“We have provided the requested evidence to the Attorney General in hopes that it will expedite the decision, but we have not been provided a timeframe,” Harris said, confirming there is no indication regarding how long Paxton’s investigation could take.
“We’re grateful for the upcoming clarity of SB1851 for us and other cities of Texas,” Harris said.
Whitesboro is not the only Texas city under investigation as a result of SB1851. The city councils of Tom Bean, Odessa and La Marque also received letters from AG Paxton.
“I have grave concerns that municipalities across Texas have blatantly violated the law in an attempt to crank up people’s property taxes,” Paxton said. “My message to these cities is this: don’t mess with Texas taxpayers. Local governments must abide by the law, and I will take every step to defend the people of Texas and their hard-earned dollars.”