Prosper's $139.2 million budget for fiscal year 2026-27 will be funded with a steady property tax rate, town officials decided.
Prosper Town Council approved a property tax rate of $0.505000 per $100 in valuation, which is equal to the FY 2025-26 property tax rate, at a Sept. 8 meeting.
Despite the level property tax rate, the average resident’s tax bill is expected to increase from $3,518 in FY 2025-26 to $3,633 in FY 2026-27, according to a presentation by Finance Director Chris Landrum.
What residents should know
Compared to the previous fiscal year, the average home’s market value decreased almost 3%, according to data Landrum presented.
For Prosper residents who receive homestead exemptions, lower property values don’t necessarily mean a lower tax bill.
The homestead exemption places a cap on the taxable value of a home. The cap increases based on the value of a home, but can only increase up to 10% each year, Landrum said.
Even as property values dip slightly, the taxable value cap may still increase as it catches up to property values that increased in previous years.
That lag creates a scenario where property tax bills can increase, even as property values decrease and the property tax rate remains steady.
The funding source
Officials expect to collect an additional $2.7 million in property tax, largely due to an increase in certified property valuations, according to town documents.
Total property value in Prosper increased from $10.8 billion in FY 2025-26 to $11.5 billion in FY 2026-27, according to the budget.
Town officials also expect to collect $13.7 million in sales tax revenue in FY 2026-27, up from $13.2 million in the FY 2025-26 budget.
Town staff attributed the projected increases in property and sales tax collection to Prosper’s growing population, new home construction and upcoming commercial developments like Westfork Crossing, Eagle Crossing Phase 2 and Gates of Prosper Phase 3B, per the preliminary budget.
“New construction really is the driver,” Landrum said.
Budget explained
Expenditures in the town’s general fund are expected to increase roughly 6% compared to last year’s budget, including an 11.5% increase in recurring expenses, according to Landrum’s presentation.
Much of that increase in recurring expenses is due to personnel costs, per the presentation.
Town officials do not plan to add any positions using revenue from the general fund, Landrum said.
Instead, the personnel-related budget increases reflect additional compensation for existing employees, especially for public safety employees like police officers, firefighters and dispatch operators.
The town’s civilian employees will receive an average merit-based pay increase of 3%, and public safety employees will get raises to align their compensation with market averages:
In similar news
While the budget does not include any new positions in the general fund, there are four new positions planned for the town’s utility funds, according to Landrum’s presentation.
The new positions will support water, sewer and stormwater operations, per the presentation.
Alongside the budget, council also passed water and wastewater rate increases at the Sept. 8 meeting.
The average resident will see their combined water and wastewater bill go from $177.70 to $205, according to previous reporting.
The increase will help fund infrastructure projects like the $269 million expansion of the Doe Branch Water Reclamation Plant, town officials said.
One more thing
Town officials also expect to spend $74.7 million on capital projects like road improvements and new facilities in FY 2026-27, a 90% increase from last year, according to the town’s budget website.
Capital projects are often paid for with funds outside the town’s operating budget like bonds or grants, according to the preliminary budget.
Major street projects planned for the upcoming fiscal year include:
Widening Teel Parkway from First Street to Freeman Way
Repairs on northbound Dallas Parkway
Widening Coit Road from First Street to Frontier Parkway
Other capital projects include park improvements, water and sewer projects and the first phase of a new parks and public works building.
