On Aug. 5, Schertz City Council voted 6-1 to establish a preliminary voter approval tax rate of $0.5350 per $100 valuation. Council member Mark Davis was the lone dissenting vote.
The city may establish a tax rate below $0.5350 per $100, but cannot exceed that figure, according to agenda documents. The city’s current rate is $0.4900 per $100, and the established no new revenue rate for 2025-26 is $.5064 per $100.
The options
Multiple tax rate increase options were established by council in prior discussions, according to a presentation by Finance Director James Walters.
Options discussed included the no new revenue rate of $0.5064, moving the rate to $0.5118 and moving the rate to $0.5190 to add funds for street and sidewalk projects.
According to the presentation, the increase would allow the city to address supplemental requests to the 2025-26 general fund.
“The staff recommends the higher rate because it gives council flexibility to pick different things, different scenarios for budget adjustments if council so desires,” Walters said.
Each $0.01 added to the city’s tax rate is equal to $33.18 on the annual average homeowner bill, according to Walters’ presentation.
What else?
Schertz’s planned rate increase is also brought on by an 8.6% increase in disabled veteran homestead exemptions in 2025, as well as retroactive adjustments for prior years that resulted in a $675,000 revenue loss in the 2024-25 fiscal year.
According to the Bexar County Tax Assessor-Collector's office, various exemptions exist for disabled veterans, including House Bill 3613 of the 81st Texas Legislature which authorized a 100% exemption for a residence homestead to a qualifying totally disabled veteran.
Walters said that 23% of Schertz homesteads have such exemptions, exempting over $1 billion from local tax rolls and taking $5.73 million in revenue. He said the city’s 2024-25 tax rate without the exemptions would be $0.4091 instead of $0.4900.
The $0.4900 rate is the second-lowest of the seven taxing units that apply disabled veteran homestead exemptions, only ahead of Fair Oaks Ranch.
Staff and council both commended the disabled veteran program, but said the state is not helping to offset the loss in revenue. Mayor Ralph Gutierrez said it is a "noble program,” but the city needs the funding, while Mayor Pro Tem Tim Brown said council would not be discussing a tax rate increase if the city were properly reimbursed.
“That’s a huge offset that the city is taking in and absorbing. Nobody’s arguing against the DVHS homestead exemptions ... the state had made the promise that they would be offsetting the losses to the cities that were hardest hit,” Brown said.
Other council members said the public should contact their local representatives in the Texas Legislature to help the city’s case for reimbursement.
“If we cannot provide the [city] services ... these disabled vets are also impacted by what we can’t provide. Even if you’re a disabled vet and you’re 100% disabled, please help us advocate. Help us advocate to make sure that the state funds this program, because it continues to grow,” Gutierrez said.
Next steps
Council will officially adopt a 2025-26 tax rate on Aug. 19, along with passing the city budget.
