Southlake council approves first-reading budget, moves to cut city tax rate by 1 cent

The Southlake City Council on Tuesday approved on first reading the city's revised 2025 budget and the proposed 2026 budget and voted 5-2 to set a preliminary property tax rate of 0.295, a reduction of one cent from the current rate.

City Manager Allison Orkowski and Chief Financial Officer Sharon Jackson presented the budget package, telling the council the proposal reduces the tax rate while preserving services and funding capital needs. Jackson described the rate change as a deliberate step to provide relief to residents while continuing to invest in infrastructure and public safety. "The 20 sixth budget proposes reducing the property tax rate by 1 cent 95, again, which is a 1 tax rate reduction," Jackson said during her presentation.

The proposal includes continued use of a 20% homestead exemption, several targeted exemptions for seniors and disabled residents and a mix of cash funding and short-term certificates of obligation to pay for capital improvements. Jackson said the city will transfer about $17.1 million in cash to capital projects in the coming fiscal year and noted that Southlake's outstanding property-tax-backed debt will be paid off within about 7 years, leaving the city with debt far below its policy limits.

Councilmembers debated the proposal for roughly an hour. Supporters said the one-cent reduction is prudent given uncertain near-term growth in new construction and continued infrastructure needs; opponents urged additional review of budget items and suggested there are places the city could tighten spending further to reach a deeper reduction.

Mayor Sean McCaskill and several councilmembers praised staff for the budget work. Councilmember Tim Williamson moved approval of the tax ordinance on first reading; the motion passed 5-2. A separate motion to approve the revised 2025 and proposed 2026 budgets on first reading passed by the same margin.

The council also held the required public hearing tied to the budget and tax ordinance before the votes; no members of the public spoke during that hearing.

The tax-rate motion and the budget approvals are first readings; state law requires local governments to publish and hold a second public hearing before adopting a final rate and budget. The council will revisit both items at a second reading on Sept. 16; the fiscal year begins Oct. 1.

What happened: The council approved three related items on first reading: - Revised FY2025 CCPD (Crime Control & Prevention District) operating budget and adoption of FY2026 CCPD operating budget (approved unanimously), - First reading of the tax-levy ordinance setting the property tax rate at 0.295 (motion passed 5-2), - First reading of the city-wide FY2026 budget and amended FY2025 figures (motion passed 5-2).

Context: City staff emphasized long-term fiscal discipline: Southlake has repeatedly used a mix of cash and limited debt to fund capital projects and has reduced long-term debt in recent years. Jackson said the city remains well below its policy debt-to-assessed-value ratio and that the budget attempts to preserve core services while also funding infrastructure and public-safety needs.

By the numbers: Staff said the proposed change reduces the city portion of the property tax rate by one cent; city leaders also highlighted the 20% homestead exemption that reduces the taxable value for an average Southlake home by an amount staff said is equivalent to further tax relief.

Next steps: The council will hold a second public hearing and take final votes on the tax rate and the FY2026 budget at its Sept. 16 meeting.

Ending: City staff posted budget documents with the meeting materials; the public can review those documents online and at the public library prior to the second-reading public hearing Sept. 16.