The budget plans for a tax rate decrease as the city’s property tax base increases and includes funding for 59 new full-time employee positions. The budget will take effect when the new fiscal year begins Oct. 1.
What you need to know
The $942 million budget was approved along with a decrease in the city’s property tax rate and an increase in water and wastewater utility rates. The property tax rate was approved at $0.412284 per $100 valuation, a slight decrease from last year’s $0.415513 per $100 valuation.
Water rates were increased 4%, and wastewater rates were increased 5%. Both rates were increased due to increasing cost of services by the North Texas Municipal Water District.
For residents, that increase will result in a $19.80 base monthly charge for water use and a $28.10 base monthly charge for wastewater use. Volumetric charges by the month were also increased. The new rates will take effect Oct. 1.
The city budget is made up of dozens of different funds that are used for different purposes. For instance, it includes operating budgets for the McKinney Economic Development Corporation and McKinney Community Development Corporation.
General operations and services by the city however are budgeted in McKinney’s general fund. It includes funding for services such as public safety, public works and the city’s library system.
In FY 2025-26, the general fund budgets for $232.2 million in revenues and $232.2 million in expenses. Both revenues and expenditures increased $12.7 million over the previous fiscal year.
Similar to last year’s $888 million budget, public safety services provided by the city’s police and fire departments account for nearly half of all budgeted expenses.
- Police
- 2 primary first responders
- 1 detective
- 1 sergeant
- 1 NIBRS specialist
- Fire
- 4 firefighters
- 1 battalion chief
- Parks and Recreation
- 1 park ranger
- 1 park maintenance technician
- Street and traffic
- 2 street maintenance technicians
Quote of note
“This budget reflects our City Council’s commitment to being responsible stewards of taxpayer dollars while planning strategically for McKinney’s future,” City Manager Paul Grimes said in a statement. “By maintaining a modest tax levy, expanding public safety staffing, and making major investments in infrastructure, we are positioning McKinney to continue delivering high-quality services as our community grows.”
Also of note
Projected revenue increases are driven by increases expected in most major categories including property and sales tax revenues. While the tax rate is lower, the city’s property tax revenue is expected to increase by nearly $12.6 million compared to last fiscal year.
About $7.3 million of that is coming from new property added to the tax roll this year, according to the budget document. Taxable value in McKinney is increasing from $39.7 billion last year to $43.4 billion in FY 2025-26.
The approved tax rate is composed of two parts.
- The maintenance and operations rate which is $0.276012 per $100 valuation
- The interest and sinking rate is $0.136272 per $100 valuation
At the approved rate the average McKinney homeowner will pay about $2,280 to the city, according to the budget.
What they’re saying
Council members approved the budget and tax rate through multiple motions and roll call votes during the Sept. 2 meeting. Before one of the votes, council member Patrick Cloutier spoke about the decisions made around the budget and tax rate.
“This is not a decision that’s really made in a day,” Cloutier said. “It’s made over the course of 365 days. When we make a decision here and a decision there, some of them are really tough, and they mean saying no to people.”
The city collects revenue mainly through property taxes and sales taxes, he said. Any sales tax collections by the city puts “downward pressure” on the city’s property tax rate, he said.
Cloutier said the property tax rate “may be a bit disappointing” but it's important to continue applying downward pressure to the rate.
“When you see a lot of the development that we do, a lot of it is with the thought of sales taxes, because if we can collect those, that puts downward pressure on our property tax rates,” he said. “We have really done real well in recent years in what I would call accelerated growth of our sales tax base.”
