Cedar Park City Council approved a $216 million budget Sept. 10 along with a higher tax rate that will raise the average homeowner’s annual property tax bill by about $49 from last year, with residents on average expected to see a roughly $1,902 property tax bill.
What you need to know
Director of Finance Erica Solis said the budget was designed to maintain current levels of city services amid rising costs and lower taxable property values.
City Council members approved a property tax rate of $0.377930 per $100 of property value. The rate is within the voter approval rate, meaning it was the highest the city could go without triggering an election for voters to approve or deny a tax increase.
What’s changed
City officials are working to maintain current levels of city services and keep projects that aim to address long-term goals on track while dealing with rising costs of things like maintenance, fuel, concrete and health insurance, Solis said.
“Cities buy a lot of concrete, hire a lot of people [and] use a lot of fuel. The things that are driving … consumer price inflation across the country are hitting us as much as anybody,” Mayor Jim Penniman-Morin said.
Taxable property values in Cedar Park decreased in 2026 for the first time since 1989, Solis said, which would result in lower revenue for the city at the same tax rate. A number of factors contributed to that drop, including local businesses converting to nonprofit status, House Bill 9 increasing the business personal property tax exemption and an increase in the number of property owners successfully contesting their property tax appraisals, she said.
That decrease in taxable values means that the city has to increase the tax rate in order to raise the same amount of revenue that funds city-operated facilities and services, according to city staff.
Several city council members said at previous public hearings that the challenges the city faces are not unique to Cedar Park and that city staff did a good job drafting the budget given the broader economic circumstances.
“We were looking for ways to trim the budget [and] make it as affordable as possible, but I don’t want the police taking longer to respond to my 911 call,” council member Michael Endres said. “The city is run pretty efficiently. There [aren’t] a lot of places to cut.”
The big picture
Solis said at a Aug. 13 meeting there are four key factors driving the budget this year:
Maintenance costs continue to rise across the board
Economic uncertainty and high inflation persist, including oil and fuel cost increases related to the conflict in the Middle East
Service contract costs have increased, including operation costs and construction contracts
New city facilities, including the new public safety training facility and RE|CREATE, need to be factored into the budget
Solis also identified what she described as key areas of investment for the city in fiscal year 2026-27:
Public safety, including compensation and equipment
Infrastructure maintenance and rehabilitation
Workforce and benefits, including performance-based merit pay and health insurance
Repairs and maintenance on existing city facilities
Zooming in
Of the total $216 million budget, $85 million is in the general fund, with about 70% of the general fund goes to employee compensation. Close to 500 of the city’s roughly 600 employees are paid through the general fund, according to city documents.
“This reflects the city's role as a service organization,” Solis said. “Our largest investment is in the people who maintain services, deliver programs and support the community every day.”
Money in the general fund mainly comes from property tax and sales tax, with smaller amounts coming from other sources like franchise fees—fees paid by companies that make money using the public right of way to deliver services, Solis said.
The second-largest fund is the $48.2 million utility fund, which is separate from the general fund because the city’s water and wastewater utility operations are funded by customers’ bills.
The remaining $83 million in the budget is allocated to funds that are set aside for specific uses, like the Type A fund, which goes toward economic development, and the Type B fund, which goes toward community development and transportation projects.
