Some Republican Texas House members floated want to give more power to the attorney general to sue cities and issue financial penalties.

Texas cities and counties already face limits on how much revenue they can generate. Local leaders have warned that further restrictions would mean fewer services like parks and libraries.

One proposal would allow the attorney general to sue cities and freeze sales tax revenues for up to 90 days.

While the pandemics impact on property taxes is not clear yet, sales taxes tend to be more volatile and began falling the moment the shutdowns started. Arlington, for example, had projected that sales taxes would contribute 25.4% of its general fund in the 2020 fiscal year. Hernandez said 40% of the citys revenue comes from sales taxes, fees from border bridge crossings and building permits. Most of the other 60% comes from property taxes, which are the most important source of revenue for cities in Texas. Cities could increase property taxes to avoid revenue shortfalls, but few have indicated they are planning to do so.