Title
Hold a public hearing on the proposed tax rate for the fiscal year beginning October 1, 2026 and ending September 30, 2027.
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DATE: September 1, 2026
TO: Kent Cagle, Interim City Manager
FROM: Judith Tangalin, Executive Director of Finance
SUBJECT: Tax Rate Public Hearing for Tax Year 2026/Fiscal Year 2027
BACKGROUND AND FINDINGS:
On August 4, 2026, City Council set the preliminary tax rate at $0.7301 per $100 valuation. In a separate action, City Council scheduled a public hearing on the proposed tax rate for September 1, 2026.
The preliminary tax rate establishes the maximum rate that City Council may adopt under the published notice. The final tax rate may be equal to or lower than $0.7301 but may not exceed that rate without completing new notice and hearing requirements.
The proposed FY 2027 Budget was originally prepared using a tax rate of $0.7215. After receiving the certified tax roll and completed tax-rate calculations, the proposed rate was updated to $0.7301. For the 2026 tax year, the no-new-revenue tax rate is $0.7048 and the voter-approval tax rate is $0.7302. Because the proposed rate exceeds the no-new-revenue tax rate, Texas Property Tax Code ?26.05(d) requires City Council to hold a public hearing before adopting the final tax rate.
Senate Bill 2, enacted by the 86th Texas Legislature, reduced the required number of tax-rate public hearings from two to one. Under Property Tax Code ?26.06(d), City Council may vote on the proposed tax rate at the public hearing. If City Council does not vote on the proposed tax rate at the hearing, ?26.06(e) requires the vote to occur no later than the seventh day after the hearing. Accordingly, the public hearing and consideration of the final tax rate are scheduled for the same meeting on September 1, 2026.
THE ALTERNATIVES CONSIDERED:
N/A
Which alternative is recommended? Why?
N/A
CONFORMITY TO CITY POLICY:
Complies with the public-hearing requirements of the truth-in-taxation...
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