Dripping Springs council sets $0.2267 proposed tax rate for FY26 notice as budget talks continue

Dripping Springs City Council voted Aug. 5 to set a proposed ad valorem tax rate of $0.2267 per $100 of valuation for public notice as part of the FY26 budget process. City finance staff said the figure combines the maintenance-and-operations (M&O) component and an interest-and-sinking (I&S) or debt-service component, and represents the maximum the council could adopt after the required public hearings.

City staff emphasized the vote was procedural: posting the higher amount preserves council flexibility to adopt a lower final rate when it votes to adopt the tax rate later this fall. Staff noted certified appraisal figures arrived an hour before the meeting and that the city’s average taxable home value is about $558,000; the recommended posting would increase the typical homeowner’s tax bill modestly while allowing the city to cover near-term debt-service obligations tied to recent bond/CO issuances.

Council members said they supported the higher proposed figure for notice so the body can continue deliberations on budget priorities — including potential changes to exemptions for seniors or homeowners — but several members pressed staff for additional options to limit the final rate, such as trimming supplemental requests or prioritizing capital repairs funded by specific parkland dedication or grant revenues. The motion to set $0.2267 passed on a roll-call vote after councilmember Talin moved and a second was recorded. City staff will publish the proposed rate and hold the required public hearings before a final adoption vote in September.

The council’s action does not immediately change tax bills; it only establishes the amount required by state notice rules as a ceiling for the adoption process. The council will receive further budget updates, including a review of supplemental park requests and the results of fee and rate studies, ahead of the Sept. 16 adoption meeting.