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Harlingen commissioners set proposed 2025 tax rate after budget workshop; staff recommends small cut
Summary
City staff presented FY2025–26 budget figures and recommended a modest reduction to the proposed tax rate. Commissioners supported a lower rate while staff said the budget can absorb the revenue loss but flagged future state changes and rising personnel costs as risks.
Harlingen city staff presented the proposed fiscal year 2025–26 budget and asked the City Commission to set a proposed tax rate following a workshop discussion that laid out revenue calculations and planned expenditures.
Finance staff said the city’s “no new revenue” tax rate calculates to 0.509129 per $100 of valuation and the voter-approval rate is 0.52856 per $100. Staff said the city’s current adopted rate is 0.527524 per $100; the budget was prepared using the current rate. Robert (finance staff) provided those calculations and the comparative revenue impacts of reducing the rate.
The commission directed staff to proceed with a modest cut below the current rate. Gabe (staff) recommended trimming the rate by 0.0025 from the voter-approval rate, and the commission later set a proposed rate of 0.52606 per $100 to appear on the public-notice schedule. Robert said the 0.0025 reduction—the option the commission favored—would reduce revenue by about $136,145 compared with the voter-approval rate; a 0.005 reduction would double that loss to roughly $272,289. He also noted that choosing the current rate instead of the voter-approval rate would show an approximate $56,000 revenue difference compared with the voter-approval figure.
Why it matters: staff told commissioners the draft budget includes one-time purchases, newly budgeted positions and salary adjustments totaling a little over $5,000,000 in added expenses; staff said the recommended rate change is sustainable for the coming year but warned of external risks. Commissioner Lopez pressed staff on long-term projections, asking whether continued reductions would push the city into structural deficits if the Legislature reduces the local revenue cap. “So if we go this route…and then that law passes, so it drops it down to 2.5%, are we putting ourselves in a bad position for the years to come?” Lopez asked. Staff replied that future legislative changes would require fresh revenue forecasting and might affect collective bargaining agreements and positions currently funded by grants.
Commissioners also discussed growth and infrastructure needs tied to new development. Mayor Norma Sepulveda noted about $100 million in new development expected to come online, and commissioners discussed sewer upgrades and coordination with Harlingen Waterworks for both expansion and deferred needs. Commissioner Morales requested a presentation from Harlingen Waterworks so the commission can see the utility’s planned projects and timing.
Formal action: Commissioners set the proposed tax rate at 0.52606 per $100 to appear on the required public notice and to be considered during the August 20 public hearing and first reading of the budget and tax ordinance. Staff said the action requires a recorded vote for the notice; the commission proceeded with the record vote and the motion passed.
Next steps: The proposed tax rate and the budget will be posted for public notice and come back for a public hearing and formal readings on August 20. Staff said it will continue to model multi-year forecasts, monitor possible state law changes affecting revenue caps, and return with updated projections if needed.
