The start of October has come and gone, meaning cities, school districts and counties  have all passed a new budget and ratified an updated property tax rate. This year the cities of Round Rock, Pflugerville and Hutto decided to approve a tax rate higher than the effective rate, which means that the tax rate will bring in more revenue than the previous year. Susan Morgan, Round Rock chief financial officer, said increases over the effective tax rate help to cover capital improvement projects and an increased cost of operation. “Everybody’s costs—and our costs —are going up, so we have to keep up,” Morgan said. In Round Rock, the FY 2017-18 tax rate represents an approximate increase of 2.7 cents over the effective rate, which is comprised of 2.1 cents from previous voter-approved bond debt and 0.6 cents from increases in operating costs to the city. Across the board, cities are devoting new revenue in their individual budgets to public safety and infrastructure. In Pflugerville five full-time positions are being added in the police department, and seven more are being added to help increased demand on city services. Capital projects also reflect that Pflugerville plans to work on improvements to Weiss Lane, Pfennig Lane, Pflugerville Parkway and Rowe Lane. Cities are also grappling with a major legislative question when planning out future tax rates and budgets. During the most recent legislative session, lawmakers attempted to pass a bill that would have capped the rollback tax rate at 4 percent above the effective tax rate. During the session, city budget departments railed against the potential legislation, saying it would limit the services cities could offer to its growing population of residents. Cities also suggested looking to fixes in the school finance funding formula, where the majority of a resident’s property tax bill goes, for property tax reform. Even though no major rollback tax rate cap was passed, city CFOs are considering it an inevitable outcome. “It will pass; if not now, then eventually,” Hutto CFO Michel Sorrell said. As a result, city officials say they are considering the possibility they might have to increase tax rates more in immediate years, when it might not be as necessary, to have a larger capacity to increase tax rates when needed in future years.