City officials in Commerce, Texas, are grappling with complex property tax calculations as they prepare for the fiscal year 2026 budget. During a recent budget workshop held on August 1, 2025, city leaders discussed the implications of changing property values on tax rates and revenue forecasts for the general fund.

The meeting highlighted a significant challenge: the total value of the community has reportedly decreased, which could lead to an increase in the tax rate to maintain revenue levels. City officials explained that under Texas law, if property values decline, the tax rate must rise to generate the same amount of revenue as the previous year. This year, the no-new-revenue rate—essentially the rate needed to keep revenue stable—has been calculated at 82 cents, compared to last year's rate of 79 cents.

Officials expressed concern about the potential confusion this creates for residents. While the city may hold the tax rate steady at 79 cents, many homeowners will see their tax bills increase due to rising individual property values. This discrepancy could lead to public misunderstanding, as state law requires officials to communicate that taxes are being lowered, despite the reality that many residents will pay more.

The city is also considering a cost-of-living adjustment (COLA) for employees, which would require an additional $120,000 in revenue. To fund this, officials indicated that adopting a tax rate between 82 and 83 cents would be necessary. However, this would also mean informing the public that taxes are being raised, which contradicts the narrative of lowering taxes.

In addition to tax discussions, the workshop addressed the need for repairs to the local dog park fence, which has suffered due to the use of low-quality materials. Officials proposed replacing it with a sturdier chain link, estimated to cost $20,000, funded through capital project allocations.

As the city navigates these financial complexities, officials are committed to transparency and ensuring that the budget reflects the community's needs while adhering to state regulations. The upcoming budget decisions will be crucial in balancing fiscal responsibility with the expectations of Commerce residents.