| Legislative Board: | City Council |
| Date: | September 15, 2026 |
| Contact: | Natassa Robbins |
| Agenda Item ID / Number: | 2026-719 / I.2 |
Public hearing, deliberation and possible action to consider an Ordinance on first and final reading and to adopt said Ordinance approving and adopting a Tax Rate of $0.3895 per $100 of valuation (consisting of the Maintenance & Operation [M&O] Rate of $0.1081 per $100 valuation for the 2026 tax year and the Interest & Sinking Rate [I&S] of $0.2814 per $100 valuation for the 2026 tax year, each of which must be approved separately) and levying a tax upon all property subject to taxation within the City of Buda, Texas, for the 2026 Tax Year for the use and support of the municipal government of the City of Buda for the Fiscal Year beginning October 1, 2026, and ending September 30, 2027; appropriating said levy amount of the various funds and items for which revenue must be raised including providing a Sinking Fund for the retirement of the bonded debt of the City; and establishing an effective date (Finance Director Bianca Redmon) [PUBLIC TESTIMONY]
In accordance with the Local Government Code, the City must adopt a property tax rate annually. A property tax rate can only be adopted by the governing body. This will be the first and final reading for the adoption of the proposed tax rate of $0.3895 per $100 valuation.
A portion of the City's annual operating budget is supported by property tax revenues. Each year, the chief appraiser prepares and certifies to the county's tax assessor/collector for each taxing unit that part of the appraisal roll that lists the property taxable by the unit. The City of Buda received the appraisal roll from the appraisal district on July 20th. The 2026 tax rate calculation was certified by the designated employee, the Finance Director, on August 6th. Staff presented tax rate options at the August 13th meeting. Council voted, to approve setting a proposed maximum tax rate of $0.3895 per $100 of value to be considered at the meeting to adopt the tax rate. The 2026 tax rate calculation was recertified after the meeting on August 13th.
The City Manager presented the proposed tax rate, along with the presentation of the City's annual budget, to City Council on August 13th. The City posted all the notices, as required by Truth-In-Taxation laws. The City's proposed tax rate exceeds the lower of the no-new-revenue tax rate and/or the voter-approval tax rate, and therefore, a public hearing was required to be held, per the Property Tax Code. The City held the first public hearing on the tax rate at the September 1st Council meeting. This was a courtesy public hearing to give any taxpayer the opportunity to comment on the proposed tax rate. It was not required by law. The required statutory public hearing on the tax rate will be held at this meeting.
The proposed rate is an increase of 8.9% from the current year rate but is effectively an increase of 8.3% due to changes in appraised value. Under state law, any rate that exceeds the no new revenue rate is considered a tax rate increase because the assessed taxable value has increased from rising property values and new value added, increasing the total amount of revenue that the City will receive. The 8.3% increase reflects the percentage increase between the proposed rate (0.3895) and the no new revenue rate (0.3597).
The proposed tax rate of 0.3895 will generate a total of $12,515,717 in total tax revenue to the City ($0.1081 M&O = $3,473,553 and $0.2814 I&S = $9,042,164).
Not applicable.
The City Council may adopt a tax rate lower than $0.3895 but cannot adopt a rate higher than this rate as the public notices published that the maximum rate that the City Council would consider is $0.3895. If a lower rate is adopted, the City Council will need to modify the Fiscal Year 2027 Budget to reflect the reduced revenue.