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The city of Katy’s property tax rate is expected to decrease as city officials work to finalize the fiscal year 2026-27 budget.
The outlook
At an Aug. 26 budget workshop, city staff proposed lowering its tax rate to $0.420 per $100 valuation, a 1.18% decrease from $0.425 per $100 valuation from the previous two fiscal years.
The fiscal year budget also had several focus areas including:
Assistant City Administrator Joey Killion said the city’s general fund revenue is $57.7 million, which represents a 129.1% increase in the past decade.
Killion said 83% of the city’s revenues come from sales, property and franchise taxes. Other sources of future revenue include Texas Heritage Marketplace, The Green at Katy Park, Katy Courts and Pelican Homes.
Zooming in
The city will increase all salary grades/ranges by 1.5% for all eligible full-time employees, totaling 4% due to each step in the raise program being at 2.5%, Killion said. Full-time employees above the maximum range will still receive a 1.5% increase.
Current employees make up 67%, or $33.3 million, of the general fund budget and of that percentage, 69% of those expenses is for public safety.
Meanwhile, $16.4 million of the general fund is for the operating and personnel expenses for the police department and $11.7 million is for the operating and personnel expenses for the fire department.
The city’s debt service obligation for the general fund this year is $3.1 million of the $17.3 million outstanding balance in current bonds, which is anticipated to be paid by the end of the 2036-37 fiscal year.
Additionally, Human Resources Director Rachel Garcia said the city’s health and dental plan will be moving to Cigna on Oct. 1.
Next steps
City Council will hold a public hearing for the proposed budget on Sept. 14 and the tax rate on Sept. 28, according to budget documents.
Council can adopt the budget after the public hearing or wait to do it until the Sept. 28 meeting along with adopting the tax rate.
