Odessa council adopts 0.4707 property tax rate after heated debate over services and budget

Odessa — The Odessa City Council voted to adopt an ad valorem tax rate of $0.4707 per $100 valuation for the 2025 tax year and fiscal year 2025–26, approving the city budget and a modest rate increase after debate about the city’s reserves and service levels.

The council approved the rate in a motion that passed on a 5–1 recorded vote and was later clarified under state tax-code requirements; city staff said the adopted rate exceeds the no-new-revenue rate and will raise maintenance and operations taxes by about 0.612417%, which the city attorney said “will raise taxes for maintenance and operation on a $100,000 home by approximately $5.31 a year.”

Why it matters: The tax decision funds ongoing city services — police, fire, water, streets and parks — and includes pay increases city leaders said are needed to recruit and retain staff. Council members who opposed or questioned the rate said they were concerned about the city’s interest income and whether more internal savings could avoid a tax increase.

Council debate and context

Councilman Haney urged caution, saying residents have told him they feel tax increases are frequent and that the city receives significant interest income. “I have 2 daughters that are school teachers…we continuously to go up on taxes,” Haney said, urging sensitivity to household budgets.

Mayor Hendrick framed the vote as a choice about services. “If you don't want services, just tell me which ones you don't want, and I will cut the budget,” the mayor said, arguing that public safety, water and roads require funding and that the budget reflects those priorities. He also defended staff work and said the city had reduced some planned fee increases for utilities to ease pressure on residents.

Finance staff and council members described a months-long budget process. Staff said interest earned across multiple city accounts is included in revenue estimates and that certain enterprise- fund interest is restricted for specific uses such as water and sewer. Council members noted the budget includes small reductions and a suspension of a planned 1.5% increase to water, sewer and solid-waste rates.

Procedural clarification

After the first vote a procedural review prompted the council to reconsider language to ensure it complied with the Texas tax code. City Attorney Keith Strecker (city attorney) read the required script clarifying that the adopted rate exceeds the no-new-revenue rate and the percentage increase. The council re-voted on language and the motion carried; staff said the outcome met the statutory threshold required for adoption when an absent member counts against the governing body for certain vote thresholds.

What the council voted on and next steps

- Adopted tax rate: $0.4707 per $100 valuation for fiscal 2025–26. - Estimated impact: approximately $5.31 annually on a $100,000 home for maintenance and operations (city staff estimate cited during the meeting).

Council members said further budget work will continue during the next fiscal year, with attention to cost controls and internal efficiencies noted as priorities by several members.

Ending

The council’s action finalizes the tax rate for the upcoming fiscal year; staff will implement budgetary changes and continuing discussions about cost-saving measures will appear in future council work sessions and budget updates.