At the August 5, 2025 Council meeting, the City Council, by record vote, established a proposed preliminary maximum tax rate of $0.5350, per $100 of value, with the M&O rate at $0.3669 and the I&S portion of $0.1681. This rate was under the Voter-Approval rate but greater than the No-New-Revenue rate. The rate was set to give council flexibility in discussion of the budget impacts of various tax rates.

Staff submitted a budget to council that would be funded at the No-New-Revenue rate of $0.5064. The No-New-Revenue rate is a rate calculated per state regulations that would raise the same amount of property taxes on properties that existed in the 2024 tax year.

In accordance with Chapter 26.05(d) of the State’s Property Tax Code, a governing body must hold a public hearing on the tax rate if the proposed tax rate exceeds the lower of the No-New-Revenue or Voter-Approval Tax Rate.  In this case, a public hearing is required as the proposed rate does exceed the No-New-Revenue rate.
 
During the tax rate adoption motion Council can approve a lower rate, however they will not be able to approve a rate higher than this without republishing the notices and holding additional public hearings. Due to timing constraints set by the State Tax Code 26.05(a), the latest council could set a new preliminary rate is September 2, 2025 without calling special meetings or declaring an emergency.

Per Sec 26.05(b) of the Tax Code, the tax rate can only be adopted with more than 60% of the votes in favor of the proposed tax rate if the motion would raise the tax rate higher than the No-New-Revenue rate of $0.5064. Since Schertz has 7 voting councilmembers, 5 members must vote in favor of the tax rate for it to pass.

To adopt a tax rate in compliance with state statutes and the City Charter.

The programs funded by this tax rate will provide additional benefits and service levels to the community.

Staff recommends adoption of the tax rate of $0.5064

The No-New-Revenue rate of $0.5064 rate will raise more total property taxes than last year by $1,287,413, or a 4.6% increase, and of that amount, $1,192,510 is tax revenue to be raised from new property added to the tax roll this year. 
 

Proposed Rate	Total Tax Rate	M&O Rate	I&S Rate	% Change
Current	$0.4900	$0.3219	$0.1681	-3.2%
No-New-Revenue	$0.5064	$0.3383	$0.1681	0.0%
Option 2	$0.5118	$0.3437	$0.1681	1.1%
Option 3	$0.5190	$0.3509	$0.1681	2.5%
Maximum Tax Rate	$0.5350	$0.3669	$0.1681	5.6%

Staff recommends that the City Council approve Ordinance No. 25-T-033 approving the Fiscal Year 2025-26 Proposed Tax Rate.

MOTION LANGUAGE: 

If the tax rate is to be set at:
1. The No-New Revenue Rate or lower, no specific language for adoption.

Or

2. If the motion is to adopt a rate higher than the No-New-Revenue Rate, then use the following language:

“I move that the property tax rate be increased by the adoption of a tax rate of XXXXXX, which is effectively a X.X% increase in the tax rate.”