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Killeen manager proposes FY2026 budget with tax-rate increase after state cuts to veterans reimbursement
Summary
City Manager presented a balanced FY2026 proposed budget and recommended a preliminary tax-rate increase to cover revenue lost from expanded disabled-veteran property tax exemptions under House Bill 2894; council set a July 22 public hearing and directed staff on a few nonprofit and mental-health funding items.
City Manager Mister Cagle presented the City of Killeen’s proposed fiscal year 2026 budget on July 1 and recommended a preliminary tax-rate increase after state changes to the disabled‑veteran property tax exemption reduced local revenue.
Cagle told the council the proposed general fund budget is about $130 million, a 4.1% increase over the prior year, and that the City expects a revenue shortfall because state reimbursement for the expanded disabled‑veteran exemption (House Bill 2894) will not fully cover local losses. “The revenue loss just in this budget year is $15,800,000,” Cagle said, noting the state’s reimbursement historically covered a portion of that loss but will not keep pace with recent changes.
Why it matters: council members pressed that the state‑level change disproportionately affects Killeen because of the city’s…
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