Title
Consider an ordinance setting a tax rate of $0.7301 per $100 valuation, comprised of $0.5562 for maintenance and operations and $0.1739 for debt service, for Fiscal Year 2027 (Tax Year 2026).
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DATE: September 1, 2026
TO: Kent Cagle, Interim City Manager
FROM: Judith Tangalin, Executive Director of Finance
SUBJECT: Setting the Tax Rate for Fiscal Year 2027 (Tax Year 2026)
BACKGROUND AND FINDINGS:
Texas Tax Code ?26.06(c) requires notice of the public hearing on the proposed tax rate to be published at least five days before the hearing. The required notice was published in the Killeen Daily Herald on Sunday, August 16, 2026, for the public hearing to be held on September 1, 2026.
The City Manager's proposed FY 2027 Budget used a tax rate of $0.7215 per $100 valuation. On August 4, 2026, at a City Council meeting, the City Council set the preliminary tax rate at $0.7301 per $100 valuation. The preliminary tax rate represents the maximum rate that can be adopted for the FY 2027 Budget. The no-new-revenue tax rate for FY 2027 (Tax Year 2026) is $0.7048, and the voter-approval tax rate is $0.7302.
Although the recommended tax rate of $0.7301 is higher than the $0.7215 rate used in the City Manager's proposed budget, the resulting tax levy is lower because the certified taxable value was significantly lower than the preliminary taxable value. The reduction is primarily attributable to the increased business personal property exemption enacted by House Bill 9.
The FY 2027 Budget presented for adoption has been updated to reflect the certified taxable value, the recommended tax rate, and the resulting reduction in property-tax revenue.
Texas Tax Code requires the vote on an ordinance setting a tax rate that exceeds the no-new-revenue rate to be a record vote and approved by at least sixty (60) percent of the members of the governing body. In order to set the tax rate above the no-new-revenue rate of $0.7048, the ordinance must be approved by at...
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