City Manager outlines 2025 budget, highlights large state-owned tax-exempt property

City Manager (name not specified) used the City of Commerce podcast to walk through the cityofCommerce's 2025 budget and revenue picture, detailing how the municipality budgets $15,619,365 across four service categories and explaining how a large, state-owned university reduces the city's taxable base.

The City Manager said public infrastructure accounts for the largest share of spending at $8,159,772 (52%), public safety receives $4,628,673 (30%), support services $1,689,153 (11%) and quality of life $1,141,867 (7%). On the revenue side, 68% of the general fund comes from taxes; service fees and fines account for about 10%, and intergovernmental transfers make up 22%.

Why it matters: the city provides police, fire, water and sewer, streets and parks for all residents but cannot collect property tax on large swaths of property owned by the state. The City Manager said $868,258,408, or 55% of the city's appraised value, is non-taxable because it is owned by the state (Texas A&M University-Commerce), leaving a net taxable value of $690,739,738, or roughly 44% of the total appraised value.

The City Manager described how the budget maps to services. Within public safety, 46.5% of that service area's funding goes to police, 46.1% to fire and emergency response, 4.6% to animal control, 1.7% to municipal court and 1% to emergency management. The municipal court is paid for from the public safety portion of the budget, and the City Manager emphasized that "our courts are not cash registers," saying tickets are used to encourage voluntary compliance rather than to raise revenue.

Public infrastructure is funded from both the general fund and the utility fund. The City Manager said budgeted shares of the infrastructure total include 31.9% for water production, 20.7% for distribution and collection, 20.6% for wastewater treatment, 16.5% for solid waste collection and 1.5% for the street maintenance fund. On the utility side, revenues come primarily from user charges: 41% water sales, 35% sewer charges, 18% solid waste and 6% other fees.

The City Manager framed the difference between taxes, fees and charges: taxes are general revenues that pay for services that cannot be billed per use (for example, fire protection), fees are flat charges tied to a specific service, and charges for service (like water and sewer) scale with use.

On taxes specifically, the city receives revenue from franchise taxes (about $525,000, roughly 10% of tax revenue), sales tax ($1,525,000, about 27% of tax revenue) and property taxes ($3,526,630, about 63% of tax revenue). The City Manager noted that state law sets franchise tax amounts and that the city does not set those rates.

The City Manager also illustrated how Commerce compares to nearby cities on net taxable value per capita: Greenville, Paris and Sulphur Springs have higher net taxable value per resident, while Commerce's net taxable value per resident was $68,020 under current exemptions. He noted that without the state exemption the per-capita net taxable value would be $171,507.

"Every dollar we spend is someone else's dollar. It's your dollar," the City Manager said, summarizing the city's perspective on fiscal stewardship and the need to align services with available revenue.

The episode concluded with the City Manager describing the city's vision: a "vibrant, self-sustaining community" that balances public safety, infrastructure and quality of life while managing resources responsibly. He said future podcast episodes will dive deeper into individual departments and budget line items.

Ending note: the presentation was informational; no formal actions or policy changes were proposed or taken during the podcast episode.