Harlingen commission sets proposed tax rate, staff says budget can absorb small revenue cut

Harlingen commissioners reviewed the proposed fiscal 2025–26 budget in a workshop and then, during the regular meeting, voted to set a proposed tax rate of 0.52606 per $100 of assessed value to be published for the required public notice and hearings.

City staff told the commission the budget was prepared using the city’s current tax rate of 0.527524 per $100; the staff-calculated “no new revenue” rate is 0.509129 per $100 and the voter approval rate is 0.52856 per $100. Finance staff recommended a small reduction of 0.0025 from the voter-approval rate and commissioners set the proposed rate at 0.52606 per $100 for the formal process leading to the August 20 public hearing and first reading.

Why it matters: the proposed rate and the budget underlie annual revenues available for public safety, infrastructure and municipal services. Staff said the package of one-time purchases, new positions and salary adjustments added roughly $5 million to the current budget and that the city can absorb the lower revenue in the short term; commissioners pressed staff about longer-term risks if the state further restricts municipal revenue growth.

Most important facts

- Robert (staff member) presented the tax-rate calculations and said the budget had been prepared based on the city’s current rate of 0.527524 per $100; he reported the no-new-revenue rate as 0.509129 per $100 and the voter approval rate as 0.52856 per $100.

- Gabe (staff member) recommended reducing the rate by 0.0025 from the voter approval rate; commissioners agreed and set the proposed tax rate at 0.52606 per $100.

- Staff told the commission the budget includes more than $5 million in one-time purchases, new positions and employee salary adjustments and that, "we can actually absorb that into our current budget" (Robert, staff member).

- Commissioners asked about risks if the Texas Legislature reduces the municipal revenue cap (staff said the city is tracking potential reductions from 3.5 percent to a proposed 2.5 percent and would need updated multi-year forecasts if that change occurs).

- Commissioners and staff discussed upcoming development—estimates of $100 million to $101 million in new construction—and sewer infrastructure needs on Harlingen’s west side; staff reported meetings with Harlingen Waterworks and said a new sewer plant could possibly be delayed 10–15 years but infrastructure upgrades are still required in some neighborhoods that experienced backups during recent rain events.

Quotes and attributions

"I would like to go with the 0.0025. That would give us a lower rate than our current rate that we have now," Gabe said when recommending the smaller reduction from the voter-approval rate.

"We can actually absorb that into our current budget without an issue," Robert said of the proposed revenue loss tied to the lower rate.

Process and next steps

Commissioners treated the workshop discussion as direction to staff; the proposed tax rate (0.52606 per $100) will be posted and the commission scheduled the required public hearing and first reading of the budget and tax ordinance for August 20, 2025. Staff said they would prepare updated forecasts if the legislature reduces the allowable municipal revenue growth cap and would provide more detail on absorbing grant-funded positions and upcoming collective bargaining agreements.

Ending

Commissioners signaled support for the staff-recommended approach at workshop and then formally set the proposed tax rate during the regular meeting; the budget will return for formal consideration as part of the August 20 public hearing and first reading process.