Buda City Council hears budget changes, approves proposed tax rate

BUDA — During a special meeting Aug. 13, Buda City Council approved the maximum proposed tax rate at $0.3576 per $100 of taxable value for fiscal year 26.

According to a presentation by city manager Micah Grau and finance director Bianca Redmon, the proposed budget outlines a tax rate increase from $0.3395 to $0.3576. This is a $0.18 increase from FY 2025 and a 5.34% change from the previous two years.

“The sales tax is projected to increase or grow about 2.5%,” stated Grau. “Our property taxes are proposed to increase slightly for a maintenance and operation rate of $0.0982 and a debt service rate of $0.2594.”

Currently, Buda’s voter approval rate is set 3.5% above the “no new revenue” rate, according to the presentation, which is the tax rate that will generate the same amount of revenue on the same properties as the prior year.

Despite this, the proposed tax rate is 8% above the “no new revenue” rate, due to a special exception in state law regarding Buda’s population being under 30,000.

Although the proposed rate is an increase from last year, it remains lower than several past rates, including $0.3673 in FY 2018 and $0.3710 in FY 2019, according to the presentation.

Within the proposed budget, the average household will continue to pay $121 in city property taxes per month. Grau explained that, due to the decreasing home values in Buda, the average home will pay the same amount in taxes as the previous year.

“It will depend on everyone’s individual properties and what their assessments have done, but for the average home in Buda, [with] this proposed budget and tax rate, they’ll pay the same amount in taxes last year as they did this year,” said Grau. “If you have the over 65 or disabled exemption, you’re actually going to pay less.”

The presentation also outlined changes in the operating fund, proposing two new wastewater positions, a 2.5% cost of living adjustment for employee salaries, a 3% step increase for sworn officers and a 5% increase in health insurance costs.

Council unanimously approved the maximum ad valorem tax rate at $0.3576 as part of the proposed budget. Adoption of the proposed budget is slated for Sept. 16, with two required public hearings to take place before. The first public hearing will address the proposed budget at 6 p.m. Sept. 2 and the second will address the proposed tax rate at 6 p.m. Sept. 16.

Buda City Council will meet next at press time Aug. 19.