Fulshear council adopts FY2026 budget, sets tax rate at $0.167903 per $100 valuation

Fulshear — The Fulshear City Council on Sept. 2 approved the city’s fiscal year 2026 operations and capital budget and adopted a property tax rate of 0.167903 per $100 of assessed value, a 3.74% increase over the previous year.

The vote followed budget presentations from city staff and public comment during a statutorily required public hearing. The council approved ordinance 2025-15-O-7 adopting the FY2026 budget as amended, then separately ratified the property tax increase reflected in the budget and adopted ordinance 2025-15-O-8 to set the tax rate.

Why it matters: Council and staff said the adopted budget balances ongoing needs — including proactive street maintenance and short-term police pay adjustments — while using one-time surplus funds to reduce debt-service pressure on taxpayers. City staff proposed and council approved shifting $500,000 that had been proposed for city-hall repairs to help cover debt service; the council also directed that roughly $445,000 from an undercalculated MUD (municipal utility district) rebate be funded from the city’s surplus this year rather than rolled into next year’s debt payment.

Key facts and actions - Adopted FY2026 operations and capital budget: ordinance 2025-15-O-7 (motion made as reflected in the meeting record; passed by council). - Ratified property tax increase reflected in the budget (required by Local Government Code §102.007). - Adopted tax-rate ordinance 2025-15-O-8: total rate 0.167903 per $100 valuation, split into a maintenance & operations (M&O) rate of 0.116523 and an interest & sinking (I&S) rate of 0.05138. - Council recorded the overall increase as 3.74% compared with the city’s prior tax rate.

Budget trade-offs and revenue assumptions City staff presented several changes used to reach a balanced budget: continued line-item cuts and operating savings, a one-time use of surplus to cover the county’s undercalculated MUD rebate for the prior year (approximately $445,000), and modest revenue increases in permit-related lines. Staff recommended increasing plan-review and contractor-permit revenue projections by $150,000 each (a combined $300,000 projected increase) and reducing the property-tax revenue projection from $6.3 million to $6.0 million for next year; the council accepted those adjustments as part of the amended budget.

Staff member Zach (as recorded in the meeting) summarized the staff view of the budget and next steps and recommended forming a committee to study longer-term salary and funding strategies: “My recommendation, which I’ve stated previously, is to do the model that I’ve basically seen Montgomery County use, which is they created a committee…tasked with how we’re going to help pay for it, and over some sort of five-year plan.”

Public comment and council concerns Residents who addressed the council included Randy Connor, who said the proposed tax increase ‘‘appears to be mostly on the backs of the homeowners’’ and urged the council to pursue more commercial growth as a revenue source. Several councilmembers argued the adopted package preserves a healthy fund balance (staff reported the city would remain well above a 25% operating-expenditure threshold after the changes) while using windfalls this year to reduce near-term debt pressure.

Voting and procedure Council adopted the FY2026 budget as amended and then ratified the tax increase reflected in the budget. The ordinance adopting the tax rate required a recorded roll-call vote; the council’s recorded votes on the tax-rate ordinance were unanimous among the voting members present (see actions[] for the formal motion language and vote tallies). The city also noted that because earlier published public-notice materials reflected a higher posted rate, staff confirmed the city could legally adopt a lower rate than that previously published, provided the proper hearings and notices had been given.

What’s next - The tax-rate ordinance takes effect for tax year 2025 as adopted; the election that would have been required if the council had adopted a rate above the voter-approval threshold was not needed because the adopted rate is below that threshold for holding an election. - Staff and several councilmembers recommended forming a committee or workshop to study multi-year salary and revenue strategies to reduce the need for similar budget choices in future years.

Ending note: The council framed the adopted package as a mix of one-time and recurring choices: use surplus and increased permit/sales assumptions this year to ease debt pressure while pursuing longer-term structural solutions for staffing and maintenance costs.