Richardson staff previews FY 2026 budget, recommends pay adjustments and holds current tax rate for now

City staff presented the proposed fiscal year 2026 budget at a Richardson City Council workshop on Aug. 4, outlining revenue pressures from national trade and workforce trends and from state legislation, proposing a mix of pay adjustments, fee changes and capital projects while recommending the council keep the current property tax rate and call a public hearing.

The presentation, led by city staff member Don Magner, laid out what Magner described as “a revenue driven budget” and said the proposal balances projected FY 2026 general fund revenue of roughly $181.3 million with planned expenditures while preserving a 90.99-day fund balance.

City leaders said the budget matters because state bills and recent appraisal changes are already reducing local revenue and because national economic forces — tariffs, supply-chain disruption and workforce shortages — are weighing on the city’s largest employers and on sales and property tax projections. Magner told the council Richardson has about 70 international firms whose decisions can materially affect local revenues and that the city is increasingly focusing on workforce development in response.

Key proposals and assumptions

- Compensation: Staff proposed an overall 4.5% compensation adjustment for employees (a combination of step/market adjustments and a general increase, with some increases effective April 1). Magner said that many public-safety staff will receive larger step increases and that the 4.5% recommendation reflects a…