College Station City Council approved a property tax increase and the city’s $576 million fiscal year 2026-27 capital budget after hours of discussion Aug. 27 about spending, inflation and the city’s financial outlook.
What you need to know
College Station’s 2025 adopted tax rate was $0.511872 per $100 valuation of property. The new approved rate would be $0.530254 per $100 valuation. As previously reported by Community Impact, the city lost around $2 billion in property value following appraisal reviews and litigation.
With that loss, council members Bob Yancy and David White raised concerns about the $576 million capital budget and tax increase. If the capital budget was passed, property taxes would account for 37% of the total budget, according to the city.
The discussion, which lasted more than three hours, included budgetary concerns regarding funding for certain departments, inflation and increasing taxpayer burden. However, city Finance Director Mary Ellen Leonard said not increasing taxes could jeopardize city projects and harm revenues in future fiscal years. She also said not being able to pay the litigation against the city could harm taxpayers more than increasing taxes now.
“We currently have $5.5 billion in litigation against the city’s appraisal district’s evaluations,” Leonard said. “In order to receive the same revenue you received last year, that no-new-tax rate will go up. That is a risk to the city when you go to set the tax rate, because if you set it too low, you’re going to have a larger no-new-revenue increase going forward.”
A closer look
Council member Mark Smith said he was supportive of the increases, praising the fund balances and agreeing with Mayor John Nichols’ words about not delaying the inevitable.
“I think kicking things down the road just makes it cost more later,” Smith said. “Then we would have to go to the taxpayers to pay for the budget we have. I’m not interested in doing things that chip away at the fund balance.”
Mayor Nichols attributed much of the increases in the budget to inflation, but said the cost of inflation falls on everyone and is a larger consequence of outside factors.
“I don’t like a perpetual no-new tax rate because you’ve lost the effect of inflation on your budget,” Nichols said. “You can’t make it up the next year. Even though you can find money here and there, I would prefer not to do that. I would like to keep a solid fund balance.”
Council member Melissa McIlhaney said the service level for the city is excellent and is proud of having one of the lowest tax rates, even with the increase, compared to other surrounding cities.
“We are very responsible with carrying a tax rate that covers our basis without being overly pushy,” McIlhaney said. “I think we would be doing ourselves a disservice by not adopting.”
Council member Bob Yancy–the only member who voted against the tax increases–said the city should look for opportunities to reduce spending.
“This is not kicking the can down the road,” Yancy said. “It’s easy to talk in generalized terms about, ‘well, we don’t want to touch that in case something happens in the future.’”
Zooming in
White said he supported the increase but questioned whether the city could find savings within the budget.
After discussing a potential motion to adjust the budget with City Manager Bryan Woods, the motion failed, but Yancy suggested cutting the budget by $2.7 million to keep the current tax rates, which also did not pass.
Council member Scott Shafer said he supported the proposed budget, praising city staff on presentation and how funds are being managed.
Going forward
The council approved the property tax increase in a 6-1 vote.
- For: Nichols, Smith, Wright, White, McIlhaney, Shafer
- Against: Yancy
The city’s FY27 capital budget passed in a 5-2 vote.
- For: Nichols, Smith, Wright, McIlhaney, Shafer
- Against: Yancy, White
The new tax rate of $0.530254 per $100 property valuation and budget are expected to take effect Oct. 1.
