San Marcos council narrows tax‑rate scenarios, asks staff for costed priorities

San Marcos City Council on Tuesday directed staff to develop budget scenarios that fall between a structurally balanced tax rate of 63.41¢ and a no‑new‑revenue rate of 64.47¢ and return to council with prioritized, costed options in about five weeks.

Councilmembers spent much of the work session focusing on how to reach residents — particularly on the East Side — who have been historically harder to engage. Several members said current outreach materials and the so‑called “dream sessions” have been confusing to residents and urged clearer, one‑page talking points and more in‑person work such as door‑to‑door outreach and town halls. “My constituents look at things like this and say, like, wait, what do you mean your city leadership is not prioritizing or considering these community facing programs?” Councilmember Alyssa Garza said during the discussion.

Staff reviewed three rate scenarios: the current rate (about 60.3¢ on the staff slide), the structurally balanced rate (63.41¢), and the no‑new‑revenue rate (64.47¢). Staff explained the state’s voter‑approval rate is set by statute as a formula tied to the no‑new‑revenue rate (roughly 72–73¢ for fiscal 2026) and would trigger an automatic election if exceeded. City staff told council that, under their estimates, the no‑new‑revenue scenario could generate about $900,000 for the items council has labeled new priorities; staff also said about $700,000 of previously cut, ongoing services remain unfunded.

Councilmembers repeatedly pressed for a clearer accounting of what would be restored at each rate and how much the council’s new priorities — the Human Services Advisory Board (HSAB) funding request, the proposed Office of Community Support and Resources, and tenant resources — would cost. “I can only do that if additional revenue generated is dedicated to social services, public‑facing programs, and council priorities,” Garza said, adding she wants to be able to explain to constituents how any tax increase would be spent.

Several councilmembers stated provisional positions to help staff focus their analysis: Mr. Mendoza signaled support for the structurally balanced rate (63.41¢); others said they were somewhere between 63.41¢ and 64.47¢. Staff said it would prioritize council‑approved strategic priorities when assembling scenarios and return with the requested cost breakdowns and supplemental‑request detail for the June meeting cycle.

Staff asked for direction about how far to pitch scenarios; the council’s direction was to provide scenarios that get the city between the 63.41¢ and 64.47¢ rates and to prioritize the strategic items council has previously identified. No formal tax‑rate adoption occurred during the session; the council’s direction was staff guidance for the next budget workshop.

City staff also flagged the budget engagement web resource — Sanmarcustx.gov/budgetengagement — as a place where the public can review materials and asked council to help disseminate the information to neighborhoods.

A next step timeline: staff will return with costed scenarios and a prioritized list of reinstatements and supplemental requests for council review in approximately four to five weeks. The council may then consider formal readings and any final rate decision through the regular public meeting process.