Brownsville presents fiscal year 2026 budget proposal; staff recommends voter‑approval tax rate and completes compensation plan phase

City finance staff presented the second budget workshop for fiscal year 2026 on Aug. 5, detailing a proposed budget that officials said relies on the voter‑approval tax rate as the modeling assumption, continues a multi‑year employee compensation plan and increases spending in targeted service areas.

Steven Lecil Muse, interim finance director, reviewed a five‑year fiscal forecast and the city’s budget policies, including a 90‑day general fund reserve target, a self‑imposed 5% debt limit (the city currently estimates its debt at roughly 3% of assessed value), and guidance on using one‑time revenue for capital and deferred maintenance. Muse said the proposed FY2026 budget uses the voter‑approval tax rate — described in staff slides as a 1.68% increase over the current rate — in revenue estimates and that growth in property appraisals could produce larger tax bills absent adjustments.

Muse said staff is budgeting approximately $6.3 million more in total revenues than the prior year’s adopted budget, with property taxes and sales taxes the two largest sources. The presentation shows sales tax modeling that budgets 98% of fiscal‑year‑2024 actual receipts (noted in the slides as about $44.6 million) and cautioned about state legislative activity that could alter property‑tax exemptions or caps (staff referenced proposed measures including Senate Bill 23 and the cap in prior years known as Senate Bill 2).

On personnel, Muse told the commission the city will complete the final phase of a multi‑year compensation plan in FY2026, targeting market adjustments for non‑civil‑service staff and senior managers. He said the city will continue previous pay‑package elements (market adjustments, stipends, tuition reimbursement and benefits) and will add a deferred‑compensation employer match of $50 for employees who elect to contribute at least $25; staff estimated a 50% participation rate would cost about $430,000 next year.

Muse also outlined anticipated collective bargaining impacts: staff estimated approximately $650,000 in increased costs tied to ongoing fire department collective bargaining this year, and anticipated police bargaining negotiations next year with an estimated $660,000 impact in a subsequent budget cycle.

Staff projected a balanced set of internal service and enterprise funds, highlighted planned transfers from PUB (shown on slides as a combined cash transfer and utility line totaling approximately $13.8 million in one chart and $10.2 million in the transfers line depending on slide grouping), and said the presentation would be followed by additional workshops on the FY2026 capital improvement program and convention and tourism fund. Muse said some line‑item differences in the presentation reflect combining cash transfers with utility receipts and corresponding expense adjustments on the PUB side.

Commissioners praised the focus on employees and flexible scheduling policies. No budget readings or formal adoption occurred at the Aug. 5 workshop; Muse said first readings on the FY2026 budget would occur at the commission meeting on Sept. 2, with final adoption scheduled later in the fall before the Oct. 1 start of the fiscal year.