LAREDO, Tex. (KGNS) – Texas Attorney General Ken Paxton has requested financial documents from nearly 1,000 Texas cities as part of a statewide investigation into potential unlawful tax increases, including the city of Laredo.
Paxton announced the initiative in a press release detailing his efforts to “ensure municipal transparency and stop illegal tax increases.” The investigation stems from a recent state law, SB 1851, which bars cities that do not strictly follow Texas’s financial statement audit and transparency requirements from raising taxes above the no-new-revenue rate.
Francisco Mata, finance director for the city of Laredo, said the audit applies to all cities regardless of compliance status.
“That audit is regardless of whether the city has done anything right or wrong. The audits were just put out by the attorney general just to audit,” Mata said.
Laredo city officials said they expect no issues will be found in the documents submitted to the state. Mata said the city has maintained compliance throughout its history.
“We’ve been in compliance every year since the city’s been in business, our last fiscal compliance was in 2024, as a matter of fact we just received our G-F-O award for that compliance,” Mata said.
While Laredo officials expressed confidence in their compliance, Paxton’s office has received complaints about other Texas cities. La Marque, Odessa, Tom Bean and Whitesboro were sent formal letters due to complaints that they were noncompliant with the no-new-revenue rate law.
Paxton’s office said during those investigations, it became apparent that cities across the state routinely fail to comply with these long-standing requirements.
While the specific documents requested from Laredo for the audit remain unclear, Mata said the city has always met deadlines for submitting annual comprehensive financial reports.
“Of course any time there is any deficiency or anything that stands out, we will make efforts to correct it, whatever is needed, whatever steps are needed, to make it better.,” Mata said. “But at this point we are very confident that we are up to par, and I think we’ll fare well.”
The Office of the Attorney General has created a complaint form that Texans can fill out if they believe local officials are violating SB 1851’s audit requirements.
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