Title
Consider public testimony regarding, and an ordinance adopting the 2025 Property Tax Rate for the City of Round Rock. (First Reading) (Requires Two Readings)
Body
This ordinance sets the ad valorem tax rate for the tax year 2025 (for fiscal year 2026). The rate is based on the net taxable property value at January 1, 2025, to assess taxes for collection during FY 2026. The proposed tax rate for the 2025 tax year is $0.372000 per $100 valuation. The proposed rate will yield the tax revenues required to fund the FY 2026 Annual Budget as proposed and presented to Council on July 24, 2025.
The 2025 proposed tax rate of $0.372000 exceeds the no new revenue tax rate of $0.348065. The increase in the proposed rate over the no new revenue rate is to provide additional funding for new police officers and firefighters to maintain good public safety and pay debt service on voter approved general obligation bonds. Under this proposal, total annual City taxes on the median taxable home value of $395,240 will be $1,470.
STATE LAW REQUIRES THAT THE MOTION TO ADOPT THE ORDINANCE BE STATED AS FOLLOWS:
“I move that the property tax rate be increased by the adoption of the tax rate of $0.372000, which is effectively a 6.9 percent increase in the tax rate.”
Summary of Proposed Tax Rate:
Maintenance & Operations (M&O) portion $0.256757
Debt Portion $0.115243
Proposed 2025 Tax Rate $0.372000
2024 Tax Rate $0.360000
2025 No New Revenue Tax Rate $0.348065
2025 Voter Approval Tax Rate $0.372075
State law further requires that a tax rate above the no new revenue tax rate requires a 60% approval by the governing body. For the City of Round Rock, that means five of seven council members must vote yes to approve this item.
If the ordinance sets a tax rate that will impose an amount of taxes to fund M&O expenditures of the taxing unit that exceeds the amount of taxes imposed for that purpose in the preceding year, the taxing unit must include specific wording in a specific format in the tax rate ordinance and on the website of the taxing unit.
The No New Revenue M&O rate for fiscal year 2026 is $0.246280 and the proposed M&O tax rate is $0.256757. Based on the proposed tax rate, the following statements must be included in the ordinance adopting the tax rate. These statements and calculations are required, but the net impact to a taxpayer is a 6.9 percent total increase.
THIS TAX RATE WILL RAISE MORE TAXES FOR MAINTENANCE AND OPERATIONS THAN LAST YEAR’S TAX RATE. THE TAX RATE WILL EFFECTIVELY BE RAISED BY 4.3 PERCENT AND WILL RAISE TAXES FOR MAINTENANCE AND OPERATIONS ON A $100,000 HOME BY APPROXIMATELY $10.48.
A public hearing and first reading regarding the tax rate are being held on August 28, 2025. The tax rate is scheduled for a second reading and final adoption on September 11, 2025.
Additional information on the budget and this proposed tax rate are available on the City's website.
The Tax Code requires additional statements certifying the City’s compliance with it. These have been included as attachments to this tax rate ordinance. Attached are:
• Exhibit A - Tax rate submission notice and form 50-856 as certified and submitted by Larry Gaddes, the Williamson County Tax Assessor-Collector (TAC), who serves as the City’s TAC; and
• Exhibit B - Form 50-882, which is required to certify the amount of additional sales and use tax revenue, if any, that will be used to pay debt service has been deducted from the total amount of debt in the tax rate calculations. City does not have sales tax revenue used for general obligation debt.
Staff recommends approval.