Schertz approves budget, sets consensus tax rate for FY 2025-26

What the council is saying

The $0.5118 rate was a compromise between council members who initially chose that rate, those that wanted the no-new-revenue rate of $0.5064 and those that wanted a rate of $0.5190.

Mayor Pro Tem Tim Brown said the city needed to stick to a COLA to keep up with employee pay scales.

“To me, it’s a no-brainer. When you look at the surrounding cities, they’re averaging a 3, 4, 5% COLA—1% is almost a slap in the face but at least it’s something,” Brown said.

Though he did not vote on the item, Mayor Ralph Gutierrez said he preferred a no-new-revenue rate and that Schertz differentiates itself from other cities by providing merit-based increases.

“It’s not that I’m saying we don’t value our staff, but we have to find a perfect balance as to what we’re going to pay our staff and how much of a burden we’re going to put on our taxpayers,” Gutierrez said.

Macaluso agreed with Gutierrez, wanting the no-new-revenue rate. He said a COLA is “almost unheard of” in private business, and if a COLA happens in Schertz it should happen after business opportunities like the upcoming Schertz Station development provide an influx of sales tax.

“In a time where some residents’ home values are going down, but they’re not going to be able to actually see that benefit of a lower tax rate, I just think going back to them and asking them for more is just not what I support,” Macaluso said.

Davis also agreed with the mayor, saying that “satisfactory employees” should be looking at anywhere between a 2-4% raise from merit, which the “vast majority” of employees qualify for. His choice was for the rate to be at $0.5118, but with annual recurring costs going to streets and sidewalks instead of a COLA and one-time street and sidewalk funding.

Council member Allison Heyward pushed back on the merit system, saying not everyone is eligible for merit and that a 1% COLA could be used towards items like income taxes and health care costs.

What else?

The FY 2025-26 budget will raise $1.59 million more in property taxes than the prior year, or a 5.8% increase. Of that amount, $1.2 million is raised from new property added to the tax rolls.

The city’s general fund budget includes the following additional expenditures:

• Raises for both public and non-public safety personnel
• Cybersecurity upgrades
• Hiring 6 firefighters to staff Fire Station No. 4
• Replacing self-contained breathing apparatus for firefighters
• Replacing radios for police
• Hiring an assistant city secretary

The $0.5118 property tax rate is not yet official. Finance Director James Walters said the ordinance setting the tax rate was not posted properly on the city’s website, necessitating another posting for a public hearing.

A public hearing and adoption of the tax rate will take place Sept. 2.