Dripping Springs residents may see a decrease in their tax bills after the Dripping Springs City Council adopted the fiscal year 2026-27 budget and a lower tax rate at a Sept. 22 meeting.
The big picture
The $28.6 million budget will raise approximately $4.96 million in property tax revenue, $360,094.72 more than last year's budget, according to a news release.
City officials adopted an ad valorem tax rate of $0.219217 per $100 of valuation. The total tax rate includes a maintenance and operations rate of $0.173100 per $100 of valuation and an interest and sinking rate of $0.046117.
M&O tax revenue funds the daily operations of the city, such as salaries and utilities. I&S revenue is used to make debt payments.
The average taxable value of a homestead in Dripping Springs is $571,800, a 1.26% increase from the previous fiscal year. Owners of homes with an average taxable value can expect to pay $1,253 in taxes to the city, a $27 decrease from last year, according to city documents.
A closer look
The FY 2026-27 budget includes $16,047,688 in expenditures and $16,836,245 in revenue.
Expenditures include:
$4,327,235 for salaries
$259,851 for public improvements
$223,258 for Founders Day
In case you missed it
City officials originally proposed a higher tax rate due to a calculation error that was identified by a citizen. Deputy City Administrator Shawn Cox said the miscalculation was made due to a change in legislation that went into effect Jan. 1.
The error caused the rate to be calculated approximately 27 cents higher because it looked as though the city lost $300 million in valuation of property.
"Thankfully a resident brought it to our attention before we adopted a rate," Cox said. "So we had to go back through a process to re-certify the worksheet [and] get the number correct so that we could adopt a rate that was accurate."
What they're saying
“We know this has been a challenging budget year, and I want to thank our city staff for the tremendous amount of time, work and care they put into getting us to this point,” Mayor Bill Foulds Jr. said in the news release. “We also recognize that our residents and businesses are facing their own financial pressures. Throughout this process, our goal has been to balance those realities with the responsibility we have to provide the services and infrastructure our growing community needs.”
