After determining more discussion was needed before approving a FY 2025-26 tax rate, the council decided to table that decision for its Aug. 27 meeting.
What to know
Shenandoah Finance Director Lisa Wasner told City Council the no-new-revenue tax rate for FY 2025-26 is $0.1300 per $100 valuation, and the voter-approval rate is $0.2037 per $100 valuation, per the agenda. The no-new-revenue rate would generate the same amount of property tax revenue as the previous year, while the voter-approval rate is the rate at which the city would need to hold an election to approve the tax rate. The FY 2024-25 tax rate was $0.1421 per $100 valuation.
Wasner said she projects the city will need to set a tax rate above the no-new-revenue rate. Under current projections, the no-new-revenue rate would only yield about $480,000 in property tax revenue in FY 2025-26, but the city needs to generate $700,000 to break even in the coming fiscal year, she said.
“We’ve had most of our growth the past 10-15 years; we’re now slowing down,” Wasner said of the city's tax base. She said the city’s expenses are high because of its location on I-45, particularly its police department.
Previously, on July 23 City Council discussed projections for the FY 2025-26 budget, including general fund revenues potentially increasing from about $12.18 million to $12.38 million.
Digging deeper
Chief of Police Troye Dunlap, City Administrator Kathie Reyer and Wasner previously developed an increased pay scale for the police department to present during the workshop, according to discussion at the meeting.
“I had a presentation about the tax rate, since we are talking about the [county] police scale and how it will be affected ... and that will change,” Wasner said.
Shenandoah's new pay structure will be presented at the Aug. 27 meeting, after taking into consideration the new county pay scale proposed at the Montgomery County Commissioners Court Aug. 12 meeting.
"The simple answer is we’re just going to have to increase the pay ... we just have to find how we’re going to do that,” Mayor John Escoto said.
What’s next
City Council will discuss the tax rate and budget Aug 27. The deadline to adopt the budget is Sept. 10.
