Carrollton CFO outlines tighter budgets ahead; council raises senior/disabled homestead exemption to $110,000

Carrollton’s chief financial officer on Tuesday told the City Council that longer-term fiscal flexibility will be more constrained as state policy and changing market conditions limit recurring revenue growth, and the council approved a consent-item ordinance raising the senior and disabled homestead exemption for tax year 2025.

Diana Vaughn, chief financial officer, said property tax remains the city’s largest recurring revenue source and that recent legislative changes and appraisal trends have reduced the city’s long-term revenue flexibility. “Our recurring source is property tax is almost 54%,” Vaughn said, explaining the city’s reliance on property tax and the constraints imposed by Texas law such as the post-2019 limitation on how much taxable values can increase in a year.

Vaughn reviewed recent and pending policy changes, including Senate Bill 2’s property-tax limits and the effect of circuit-breaker exemptions and business personal property changes passed in the 2025 legislative session. She said some legislative changes will affect the city’s finances in future fiscal years — for example, a business personal property exemption increase to $125,000 is effective Jan. 1, 2026 and would affect the 2027 fiscal year budget. Vaughn described the overall outlook as tighter than prior years and urged council to be strategic about fee reviews, franchise fees and other budget levers.

On the consent agenda council approved an ordinance amending Ordinance 4143 to increase the homestead exemption for individuals 65 and older and for disabled individuals from $97,000 to $110,000 for tax year 2025. Staff indicated the change had passed through the finance committee and appears on the adopted consent items. The consent motion approving items 7–9 and 11–13 was made by Councilmember Tim Klein, seconded by Councilmember John Palacios, and passed unanimously with Councilmember Palomo absent.

Council also ratified emergency storm debris removal by Crowder Gulf in an amount not to exceed $510,800 as part of the consent items; staff said debris volume and costs have risen and recommended creating a stronger storm-debris reserve in future budget work. Vaughn said staff will likely recommend establishing a $500,000 savings account dedicated to storm debris in the upcoming budget process.

Vaughn urged council to maintain conservative assumptions. “We don’t wait until it’s budget time to cut,” she said, describing Carrollton’s longstanding financial policies and managed-competition reviews. She recommended the audit and finance committee work on new revenue sources and potential fee and service-delivery adjustments over the next budget cycle.

Why this matters

Carrollton’s limited ability to grow recurring revenues beyond the state-imposed caps means the city must prioritize spending decisions and consider strategic use of one-time funds, fee adjustments, franchise-fee audits and potential enterprise/fee-based funding for some services. The homestead-exemption increase alters the tax burden distribution for certain homeowners and will be reflected on tax rolls for the 2025 tax year.

Clarifying details

- Ordinance amendment: raises senior/disabled homestead exemption from $97,000 to $110,000 for tax year 2025 (item 8 on consent). - Emergency storm debris removal: ratified contract with Crowder Gulf not to exceed $510,800 (item 13 on consent); staff to recommend a $500,000 debris savings account during the budget process. - Fiscal context: property tax comprises roughly 54% of the general fund’s recurring revenue; property-tax growth constrained by post-2019 law (capped growth rules). Vaughn said councils should expect reduced flexibility for several years.

Next steps

Finance staff will continue budget development with the council, bringing options for strategic reductions, fee reviews and potential new revenue sources. Any future local commitments tied to legislative changes or one-time funding will be brought to council for formal action.