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Court debates tax-rate options as finance chief presents multi-year budget scenarios
Summary
McLennan County finance staff presented scenarios showing fund-balance trajectories under different tax-rate increases; court members signaled support for holding discretionary outside-entity increases to 2025 levels and discussed a 1'to-2-cent permanent tax-rate adjustment as a strategy to protect fund balance.
McLennan County Commissioners Court spent a substantial portion of its July 15 meeting on preliminary FY2026 budget scenarios and tax-rate options after the county finance director presented multi-year projections.
Nut graf: Finance staff modeled three scenarios (1 cent, 1.5 cents and 2 cents of additional tax rate) with conservative assumptions: 5% annual taxable-value growth, 3% annual expenditure growth and a 3% assumed under-budget (vacancy/turnback) rate. The scenarios showed that a modest tax-rate increase now would slow the decline in unassigned fund balance and could avoid another increase in later years under the model's assumptions.
Details: The finance director said McLennan County has reduced its tax rate by about 21 cents over the last nine years while general-fund expenditures have grown; those actions mean the county is approaching a year in which revenue assumptions will no longer cover projected operating costs without drawing down fund balance. The court reviewed each scenario and asked for conservative planning. Commissioners agreed, for initial planning, to hold outside-entity funding at FY2025 levels and to treat two large new grant requests (each about $2 million) as low-priority, to be reconsidered after the court has a clearer bottom-line fiscal picture.
Several commissioners and staff discussed "range" thinking on fund-balance targets (for example, a comfortable floor at 28% and ceiling at 33%) rather than a single target. The finance director said she would refine projections, incorporate the committee's direction and return with updated numbers and personnel-cost scenarios for further decision-making. The court did not adopt a final tax-rate decision at the July 15 session.
Ending: Court scheduled follow-up budget sessions; staff will return with refined projections and personnel-cost options (including COLA and step adjustments) before any final decision on the tax rate.
Speakers cited in this article: Frances (Finance Director); Commissioner Smith; Commissioner Perry; Amy (County Engineer); Judge; Dustin (county staff).
