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Taylor council reviews preliminary FY26 budget, proposes lower tax rate and no utility rate increases
Summary
City staff presented a preliminary fiscal 2025–26 budget that holds water and sewer rates steady, proposes a 58.5¢ city tax rate and relies on conservative sales-tax estimates while preserving reserves and seeking FEMA reimbursements for storm cleanup.
Taylor City Council staff presented a preliminary fiscal year 2025–26 operating plan at a special budget workshop on June 24 that keeps water and sewer rates unchanged and proposes a city property tax rate of 58.5 cents per $100 of assessed value while relying on conservative sales-tax projections.
City staff said the proposed operating budget assumes lower sales-tax receipts this year and conservatively sets aside $1 million of potential revenue tied to Samsung-related sales taxes; the set‑aside will only be spent if those revenues materialize. The presentation said reserves remain healthy after several years of growth and one‑time drawdowns for capital projects and winter‑storm debris removal. Staff said the city’s required minimum fund balance is 25 percent and noted last year’s reserve peak of about 73 percent.
The packet includes a tax-bill comparison showing that, because average home values rose from about $280,000 to $294,000 year over year, a homeowner would see a modest change in the city portion of the tax bill under the proposed lower rate; staff also noted recently enacted changes in the school homestead exemption that affect overall property tax bills.
Officials described key timing steps: the appraisal district’s certification of the tax roll is due July 25; staff plans to deliver the full proposed budget in August; the council must vote no later than its September meeting to meet statutory hearing and adoption schedules. Staff emphasized several moving assumptions, including health‑insurance premiums (expected to be provided by the carrier in July) and final sales‑tax receipts.
Staff also reported on an ongoing FEMA and Texas Department of Emergency Management reimbursement process tied to a winter storm cleanup, noting the city is seeking roughly 80 percent reimbursement of about $5.6 million in debris‑removal costs. If approved, that would materially affect reserves and the one‑time fund uses included in the proposed budget.
The workshop did not contain any formal votes. City staff requested council feedback on priorities and said managers will bring a final manager’s proposed budget back in August for council review and required rate-setting votes.
Ending: Staff reiterated that the recommended preliminary budget is conservative, that the utility fund is balanced under current assumptions, and that staff will return with the full proposed budget, supporting materials and the statutory “truth in taxation” worksheets in August for council consideration.
