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Lakeway budget gap forces council to weigh tax hike, spending cuts or delayed projects
Summary
City staff showed a narrower-than-expected revenue outlook and higher baseline expenses for fiscal 2025–26, prompting Lakeway City Council to set a Sept. 22 public hearing on the budget and tax rate while debating whether to raise the rate, trim projects or accept a one-time shortfall.
Lakeway City Council on Monday reviewed a draft fiscal 2025–26 operating and capital budget that shows slower property-value growth and uncertain permit revenue, leaving a potential shortfall unless the council raises the tax rate or cuts projects.
City Manager Joseph and Finance Director Rick summarized the $20.8 million operating budget and stressed that the city’s growth-driven revenue has slowed. Rick said the appraisal district’s numbers reduced the city’s “base value” compared with last year and that staff used a conservative methodology for projecting building-permit and site-development revenue.
Why it matters: Lakeway has historically relied on new-development revenue to keep its tax rate low while funding street, park and facility projects. With the recent slowdown, the council must choose whether to increase the property tax rate to preserve capital spending or scale back…
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