After hearing nothing more from Attorney General Ken Paxton’s office regarding his determination that the City of Whitesboro is not in compliance with Senate Bill 1851, Whitesboro City Administrator Phil Harris recommended to the City Council last Tuesday that the city release the tax funds it’s been holding since October.
When the City Council increased the property tax rate last fall, Paxton issued a letter to the City of Whitesboro stating that he was investigating the city regarding Senate Bill 1851. (The city councils of Tom Bean, Odessa and La Marque received similar letters.) The newly-passed bill stated that any city who didn’t file their financial audit within 180 days of the fiscal year-end would be penalized by having to adopt a no-new revenue tax rate.
City leadership and attorneys felt the law applied to the tax rate in the coming year, and therefore Whitesboro would be considered compliant. However, as a precaution, the city set aside those collected tax funds in a separate account while awaiting the Attorney General’s decision.
In a December email, Paxton notified the city that he found Whitesboro to be non-compliant with the requirements and the city would therefore be subject to the penalties. However, the letter offered no further details or directives.
“The City still holds the position – as does our legal firm and that of TML – that any rulings would apply to raising taxes in 2026 next fall,” Harris said. “Therefore, it is my recommendation that we release those funds so we can begin applying that money to projects.”
Harris also said he doesn’t anticipate having to increase property taxes again next fall, stating that the city is currently “in a good place.” His goal is to focus on commercial and sales tax growth as a means to generate revenue for the city.
While no action was taken, a special called meeting has been scheduled for Feb. 26 during which the City Council will meet with the auditor to ensure this year’s financial audit is filed by the deadline.
Source: Freepik.com