San Marcos council approves first reading of $371.1 million budget, sets maximum tax rate at 67.69¢

San Marcos — The San Marcos City Council on Tuesday approved on first reading an operating budget for fiscal 2026 and set a maximum proposed property tax rate of 67.69¢ per $100 of taxable value, measures council members said are intended to preserve city services and create limited one‑time funding for deferred needs.

The council approved ordinance 2025‑36 on first reading to adopt an operating budget staff outlined at roughly $371 million for the fiscal year beginning Oct. 1, 2025, and set the maximum proposed tax rate under ordinance 2025‑37 by a 7‑0 vote. Council members said final adoption of the budget and a final vote on the tax rate are scheduled for Sept. 16, 2025.

Why it matters: City staff told the council that property and sales tax revenues have not kept pace with growing costs and that several state bills under consideration could further limit local revenue growth. Staff said the 67.69¢ rate would generate about $3.5 million more than the current rate and provide approximately $2.3 million in ongoing capacity and $1.3 million in one‑time funding to address deferred capital and community priorities.

Budget and tax highlights

- Proposed operating budget (FY2026, first reading): approximately $371,102,562. - Staff figures discussed during the presentation: estimated total revenues of about…