Title
Consideration of and action on approving the debt service tax rate for tax year 2026.
Body
On August 18, 2026, the City Council took a record vote to begin the process of adopting an ad valorem tax rate of $0.720000 per $100 valuation for tax year 2026 (FY 2026-2027). This rate is unchanged from the current ad valorem tax rate of $0.720000 per $100 valuation set by the City Council for tax year 2025 (FY 2025-2026).
Under Sec 26.05 of the Tax Code, the tax rate consists of two components, the debt service, or interest and sinking, tax rate, and the maintenance and operations tax rate, each of which must be approved separately. Based on the certified estimates of assessed value, the calculations prescribed by the comptroller's truth in taxation worksheets, and the City’s FY 2027 debt service requirements, the debt service, or interest and sinking, tax rate for 2026 is set at 0.198659 per $100 of taxable value to support the debt service requirements in fiscal year 2027.
The total tax rate of $0.720000 per $100 valuation is set to be adopted by ordinance following the separate approvals of the maintenance and operation and debt service tax rates.
Fiscal/Budgetary Impact:
Ad Valorem revenues in the Debt Service Fund of the City’s adopted FY 2026-2027 budget were established based upon a proposed debt service tax rate of $0.198659 per $100 of valuation.
Recommended action
A record vote is necessary to approve the debt service, or interest and sinking, tax rate of $0.198659 per $100 valuation for tax year 2026 by motion as follows: "I move to adopt the debt service tax component of the tax rate of $0.198659 per $100 valuation for tax year 2026.”