Staff Report
BUDA — Buda City Manager Micah Grau presented the proposed budget to city council at a special meeting Thursday, Aug. 13, during which council was required to take a record vote on the maximum proposed tax rate.
Council voted unanimously to set the maximum proposed ad valorem tax rate at $0.3895 per $100 valuation. The ad valorem tax rate is comprised of the maintenance and operations at $0.1081 and $0.2814 for debt service (I&S). The impact to the median residential property owner amounts to an increase of $8.03 per month.
The ad valorem tax rate supports the proposed budget, which outlines service priorities and community investments for the coming year, while addressing financial constraints driven by rising costs and limited revenue growth.
The proposed budget totals $57.1 million, including approximately $54.2 million for operating expenses and $2.8 million for capital improvement projects.
The median home in Buda decreased in taxable value, thus, the median home with a taxable value of $383,550 will pay $1,474.45 in property taxes to the city in 2027, compared to $1,378.12 in 2026, if the ad valorem rate of $0.3895 is adopted.
Additionally, the proposed budget includes an increase to water and wastewater rates. Beginning with October meter readings, water rates would increase by 8% and wastewater rates would increase by 4%.
For the average customer, this means a monthly bill increase of approximately $8.75, or 6.1%. According to the city, the increase is necessary to pay the rising costs of operations, including the development of new water supplies, rising costs of materials and services and debt service associated with system improvements.
“The proposed tax rate reflects a broader, long-term discussion about how the city can responsibly support Buda’s continued growth,” said Grau. “The adjustment to the debt service portion of the rate helps the city meet its current debt obligations associated with the city’s capital improvements, like the community-approved 2021 General Obligation bond. The I&S portion of the tax rate will need to increase next year, as well, to support the nearly $90 million bond that was approved by voters in 2021. Adoption of this rate balances the budget, while continuing to maintain one of the lowest municipal property tax rates in the region.”
The city developed the FY 2027 budget under continued economic pressures, according to a news release. Expenses are outpacing revenues amid low assessed-value growth and rising operating costs, including an increase in insurance premiums, higher fuel costs and general inflation. To present a balanced budget, the city manager and Finance department reduced departmental requests by $3.7 million. Reserves are available for one-time expenses.
The public is invited to attend and participate in the upcoming city council meetings and hearings on the proposed budget and tax rate:
• Tuesday, Sept. 1 – Public hearing on the budget and courtesy hearing on the tax rate.
• Tuesday, Sept. 15 – Public hearing on the tax rate, courtesy hearing on the budget and first and final reading of the ordinance to adopt the budget and tax rate.
To review the proposed FY 2027 budget and the Five-Year Capital Improvement Plan, visit www.budatx.gov/budget.
