Friendswood officials are considering a tax rate for fiscal year 2026-27 that is $0.456 higher than the current rate. Between now and when the city must adopt its tax rate in September, city officials can consider a lower rate.
City Manager Morad Kabiri said city staff are proposing a higher tax rate partially due to changes in federal and state policy that have created new costs for the city.
The details
Friendswood City Council voted unanimously at its Aug. 3 meeting to propose a tax rate of $0.559723 per $100 valuation of a home, an increase officials and city staff said was due to rising debt service obligations, a 2.75% merit increase for staff and the need to fund deferred maintenance.
The largest area of spending in the proposed $129.4 million budget is capital improvements, followed by public safety, according to city documents.
Growing challenges
Kabiri said the federal government notified the city that it would no longer reimburse certain severe weather events such as Hurricane Beryl, which created $3.4 million in debris removal costs.
Additionally, House Bill 9, known as the Texas Tax Exemption Bill, passed during the 89th Texas Legislature, increased commercial property exemptions from $2,500 to $125,000, creating a $35.3 million loss for the city, which residential property owners will have to offset, according to a presentation shared at the meeting.
The local perspective
In September 2025, City Council passed a tax rate that matched the previous year’s tax rate and was higher than the no-new-revenue rate. Council member Michael Ross said at the August meeting he worried increasing the tax rate by more than 4 cents could set a precedent to incrementally raise the tax rate over the next several years.
Kabiri said because Friendswood doesn’t capture increased revenue from frequent new developments like neighboring communities such as League City do, the city is forced to choose between raising taxes or lowering the level of service it provides to residents.
"Friendswood is a slow growth community, so we're going to have this conversation multiple times over the next decade,” Kabiri said. “[Neighboring communities] are able to live off new construction and basically kick the can down the road. Friendswood doesn't have that luxury.”
The city expects to have $78 million in new construction value this year, which is down $19.8 million from the previous year, according to the presentation.
Looking ahead
On Sept. 14, City Council will hold a public hearing at Council Chambers, located at 910 S. Friendswood Drive, Friendswood, where residents can share feedback before council votes to officially adopt the tax rate and budget for FY 2026-27.
