The breakdown
The FY 2025-26 budget is being developed based on a no-new-revenue rate, which is a tax rate that collects the same amount of total revenue for the city as the previous year.
While the overall revenue is consistent, the no-new-revenue rate does not necessarily mean an individual homeowner's tax bill will stay the same, because of variance in property values.
For the average residential homeowner with a homestead exemption, this rate would result in a $5.04 per month increase in property taxes. For residential homeowners without a homestead exemption, the increase would be $1.39 per month.
What else?
Sales tax revenue also helps sustain a city's budget. Hutto projects $11.2 million in sales tax revenue for FY 2025-26, an almost 10% increase from this year’s estimated total.
“The growth seems to be sustained in the projections,” Earp said. “If we are wrong on sales tax, just like this year, we had to make an adjustment and adjust down our projections mid-year.”
Digging deeper
Based on feedback from a “sunset committee” of city employees in non-leadership roles, Earp proposed certain cuts to keep the budget down, including:
- Eliminating phone allowances for city employees
- Reducing fuel-related costs by reassessing take-home vehicle policies
- Consolidating software platforms and centralizing asset management systems
- Standardizing clothing allowances
- Standardizing training and travel
- Two new police officers
- Increased street maintenance funding
- City hall security upgrades
- Outdoor alert and weather monitoring stations
- 2.5% merit increase for personnel
Hutto City Council recently considered plans for a new justice center to accommodate the police department amid population growth. The city does not have funding allocated for the justice center expansion in the budget draft or through current debt issuance, Earp said.
City Council members expressed interest in finding a way to fund the new facility without raising the tax rate, possibly by reallocating money budgeted for other capital improvement projects or using additional bond funding.
“I do like the idea of seeing what we can save on any additional bond funding to apply to the justice center to really get a chunk of that without having a tax impact from that,” Mayor Pro Tem Dan Thornton said. “We still have to go through the whole exercise of right-sizing that so that it's a facility that we can grow into and we can add to ... in a responsible way going forward.”
