During a Sept. 15 meeting, the Buda City Council adopted its fiscal year 2026-27 budget, raising the tax rate and expected property tax payments for an average home.
The gist
The approved $57.28 million budget continues city investment in areas including public safety, water supply and infrastructure, streets, parks and operations, according to a city of Buda news release.
Through the budget planning process, City Manager Micah Grau cut $3.7 million in departmental requests to reduce the tax and fee burden on community members, according to the release.
“The council is very mindful about balancing the financial impact to its residents while still investing in the future of the community,” Grau said in the release. “This is the reason that Buda has one of the lowest municipal tax rates in Texas.”
Diving deeper
The council approved a property tax rate of $0.3895 per $100 of taxable value, a $0.0319 per $100 increase from FY 2025-26. The average homeowner will pay $8.03 per month more than in the previous year, according to the release.
The tax rate increase was driven by a decline in assessed taxable property values and the city’s rising debt service obligations related to capital investments, such as the voter-approved 2021 General Obligation Bonds, according to the release.
The bonds, totaling $89.9 million, fund the construction of transportation and park improvements throughout the city. Buda borrows the money as needed to complete projects.
“We recognize the financial hardship facing families with the rising costs of fuel, groceries and inflation,” said Mayor Lee Urbanovsky in the release. “We know asking our residents to contribute more is a significant responsibility, and the budget provides our community with transparency about why it is necessary, how those dollars will be used and the value they will bring to Buda.”
A closer look
The adopted tax rate was higher than both the no-new-revenue tax rate, $0.3597 per $100 of taxable value and the voter-approved tax rate, $0.3895 per $100, but lower than the de minimis rate, $0.3970 per $100, according to agenda documents.
The de minimis rate is equal to the sum of the no-new-revenue rate and the current debt rate for the city. The approved tax rate could be adopted since it was less than the de minimis rate, even though it was greater than the voter-approval tax rate.
Qualified voters in Buda have the opportunity to petition against the adopted rate, requiring an election to be held to determine if the rate should be reduced.
If the majority of voters reject the tax rate, the city would adopt the voter-approval tax rate of $0.3895 per $100 of taxable value, according to agenda documents.
