Southlake City Council approved the city’s fiscal year 2026-27 budget of $133.65 million and lowered its tax rate to $0.29 per $100 valuation during its Sept. 15 meeting.
What it means
The city adopted a tax rate of $0.29 per $100 valuation, which is a $0.005 decrease from the current rate of $0.295 per $100 valuation.
The new rate is below the no-new-revenue rate of $0.301616 per $100 valuation, meaning that the city will receive nearly $7 million less revenue from property taxes than during FY 2025-26, according to the budget.
The FY 2026-27 tax rate means a resident who has a home with the average value of $1,085,031 would have a tax bill of $2,483. This is a decrease from the current tax rate, which would result in a bill of $2,526, according to the city.
The city is also continuing its 20% homestead exemption, which will lower the taxable value of an average-valued home by $217,006, resulting in an effective tax rate of $0.231 per $100 valuation, according to city documents.
A city’s tax rate is made up of a maintenance and operations rate and an interest and sinking rate.
The maintenance and operations rate funds general operations of the city and is $0.235 per $100 valuation, while the interest and sinking rate is used to pay off existing debts and is $0.055 per $100 valuation, according to the city.
Budget explained
The city also approved its budget, which has increased projected revenue to $159 million and decreased expenditures to $133.7 million.
While expenditures are lower in the FY 2026-27 budget, no city services have been decreased and the budget includes steps to increase employee benefits and retention, including a 3% cost-of-living pay adjustment for employees, according to the city.
The city is also increasing the employee vacation accrual cap from 240 hours to 280 hours and increasing the city contribution toward retiree health insurance for the first time since 1998.
The city is also decreasing the size of its workforce by 5.55 positions and leaving 6 full-time equivalent positions vacant through the year to determine if they can be eliminated, according to the city.
FY 2026-27 begins on Oct. 1, 2026.
Items worth mentioning
Beginning Oct. 1, utility rates are increasing for Southlake residents.
Water rates are increasing by 15% due to rising operating costs and investment in the water system by the city of Fort Worth.
Sewer rates are increasing by 5% due to demand requiring infrastructure upgrades.
Trash and recycling services will increase by $0.58 a month in accordance with the city’s five-year agreement with Community Waste Disposal to account for rising operating costs.
