San Marcos City Council adopted a $371,339,935 operating budget for fiscal year 2026 and set a property tax rate of 65.15¢ per $100 of taxable value to help cover potential emergency medical services (EMS) expenses and other needs.

City Manager Stephanie Reyes said the proposed budget "supports the essential services residents rely on every day," noting it funds parks, libraries, roads, police, fire and emergency management while expanding human services and legal aid. Finance Director John Locke walked council through the assumptions behind the plan and the related capital improvements program totaling $114,815,000.

The budget discussion centered on two revenue pressures: stagnant sales-tax receipts and a likely new $2,000,000 annual cost if San Marcos must assume EMS service previously handled by San Marcos Hays County EMS partners. Reyes told the council the city commissioned an EMS study and that the $2,000,000 figure is an estimate based on ambulances and medic units going offline as partner jurisdictions establish their own services. Fire Chief Les Stevens explained the low recovery rate on ambulance transport fees, saying the overall collection rate for the service area is "under 40%" and the city’s in-area rate is "somewhere around 35 to 37%."

Nut graf: Councilors balanced the city’s stated need to prepare for a potential sudden shift in EMS responsibility with concerns about asking taxpayers for more money before final EMS study results. Council ultimately adopted the budget and chose a tax rate designed to preserve capacity for EMS while holding some one-time spending until next year.

Most important facts
- Council adopted the FY2026 operating budget of $371,339,935 and the FY2026–2026 CIP of $114,815,000 on 2nd reading. Motion to approve the budget passed 7–0.
- Council separately ratified the property-tax revenue increase embedded in that budget (Resolution 2025‑184R). That ratification passed 7–0.
- On the tax-rate ordinance, after a failed motion to adopt a higher 67.69¢ rate, council approved a tax rate of 65.15¢ per $100 (a 3.8% increase over the no-new-revenue rate) on the second reading by a 5–2 vote.

Why it matters: The budget and chosen tax rate jointly determine what the city can fund next year. The adopted rate preserves capacity to absorb a potential $2 million recurring EMS cost that could otherwise force midyear cuts to services; it also leaves limited capacity for one-time items previously funded with expiring federal dollars.

Supporting details and council debate
Council and staff walked through multiple rate options during the public hearings and workshops leading to the vote. Staff presented three illustrative tax-rate choices: the no-new-revenue rate (62.78¢), a middle option intended to cover EMS (65.15¢), and a higher option that would have funded additional one-time priorities (67.69¢). City Manager Reyes and Finance Director Locke described the 65.15¢ option as the staff recommendation to cover the expected EMS shortfall while avoiding immediate cuts to core operations.

Councilmembers expressed differing priorities. Councilmember Lorenzo Gonzales moved approval of the budget; the motion was seconded by Councilmember Rodriguez and passed unanimously. Public commenters urged caution: resident Lucy Johnson asked council to "take those out of this budget and save whatever property tax increases you can for the taxpayers this year," arguing that tax increases should fund clearly defined, committed items. Another commenter, Sam Young, urged more local economic development to expand the tax base.

Operational context and constraints
Locke described the city’s revenue mix and noted sales tax was running below prior years and that property-valuation growth for new development has been insufficient to offset declines in existing property values. He and Reyes emphasized the compounding effect of this year’s adopted rate on the city’s future flexibility: a higher adopted rate increases future capacity under state law but also increases the risk of insufficient reserves if projections change.

On EMS: staff presented an interim estimate that the city may need to absorb roughly $2,000,000 annually if partner jurisdictions withdraw from shared EMS arrangements. Chief Stevens and other staff said the city does not currently run a standalone EMS transport service; the estimate covers personnel, ambulances and facility needs to operate a municipal EMS. Reyes said a consultant’s study is due in November and will recommend operational models and more precise costs.

Budget impacts on residents and one-time spending
Staff presented example impacts on an average taxable residence: at the adopted 65.15¢ rate the annual city tax paid by the average taxable value would increase (staff’s slide showed increases ranging from about $47 under some options to roughly $138 under the higher 67.69¢ option). Council discussed prioritizing one-time items previously supported by federal ARPA funds; staff said many of those line items will require a future council decision if recurring local funding cannot be identified.

Quotes
- "The $371,300,000 budget supports the essential services residents rely on every day," — Stephanie Reyes, City Manager.
- "Our overall collection rate for the entire area currently covered is under 40%. I think ours is somewhere around 35 to 37 in the city," — Les Stevens, Fire Chief.
- "If you are not certain that that money will be spent on those projects... I ask you to do your best to take those out of this budget and save whatever property tax increases you can for the taxpayers this year," — Lucy Johnson, resident (public comment).

Ending
Council adopted the FY2026 budget and ratified the property-tax revenue increase. The council set the tax rate at 65.15¢ per $100 of taxable value (5–2 vote) to preserve capacity for an expected EMS funding obligation while deferring some discretionary one-time spending decisions to future meetings when more information is available.

sections":{"lede":"San Marcos City Council adopted a $371,339,935 FY2026 budget and set a 65.15¢ tax rate to preserve capacity for a potential $2 million EMS obligation.","nut_graf":"The rate and budget were adopted after staff warned that partner jurisdictions withdrawing from shared EMS services could require the city to absorb recurring operating costs; council balanced that risk against concerns about raising taxes before one-time projects were finalized.","ending":"Council set the budget and tax rate with votes on Sept. 16; staff will return with the EMS study in November and with prioritized proposals for one-time items funded by expiring federal dollars."},