The City Manager's recommended plan would lift the median homestead tax bill while balancing a $117.3 million all-funds budget.
HUNTSVILLE, Texas. Huntsville officials are weighing a proposed fiscal year 2027 budget that would raise the city property tax rate to 37.75 cents per $100 of value and increase the estimated tax bill on the median homestead to $942.96, according to the City Manager's recommended budget posted Aug. 10.
The proposal is still a recommendation, not an adopted budget. Even so, the document gives residents an early look at how city staff want to cover higher payroll, maintenance, debt and utility system costs while keeping the proposed tax rate just below the voter-approval rate of 37.9 cents per $100.
The budget cover page says the plan would raise $750,421 more in property tax revenue than the current budget, a 7.96 percent increase. Of that amount, $137,875 would come from new property added to the tax roll.
How the proposal would affect homeowners
The recommended property tax rate is listed at $0.377500 per $100 of taxable value. The current year's rate is $0.347500. The budget also lists a no-new-revenue tax rate of $0.350600 and a voter-approval tax rate of $0.379000.
Under the taxpayer impact statement, the city estimates the median homestead taxable value at $249,790 for the coming fiscal year. At the proposed tax rate, that home would carry a city tax bill of $942.96. That is $60.62 higher than the prior year's estimated city tax bill of $882.33, an increase of about 6.9 percent.
The same table shows how the bill would change under other tax scenarios. At the no-new-revenue rate, the estimated city tax bill on the median homestead would be $875.76, or $6.57 less than the prior year. At the voter-approval rate, the estimated bill would be $946.70, or $64.37 more than the current year.
That makes the proposed rate notable for two reasons. It is materially above the no-new-revenue rate, which would hold total tax collections roughly flat on existing property, but it also stays slightly under the ceiling that would trigger the voter-approval comparison in the city's own budget tables.
The budget document also lists total debt obligation secured by property taxes at $1,197,267. The debt rate portion of the proposed tax rate is shown at $0.041400 per $100 of value, compared with $0.042400 in the current fiscal year.
Where the city expects money to come from
The all-funds summary projects $117,370,109 in total revenue for fiscal year 2027 and $117,315,026 in total expenditures, with $55,083 shown as reserve contributions and no remaining operating gap.
On the revenue side, the largest single line item in the all-funds summary is water service charges at $33,190,632. Wastewater service charges are projected at $15,437,838, solid waste service charges at $9,028,375 and stormwater drainage fees at $1,772,500. Sales tax revenue is projected at $14,000,000 and total property tax revenue across all funds at $11,058,243.
The general fund section of the recommended budget shows $42,445,673 in revenue and the same amount in expenditures. The document lists an estimated unallocated general fund reserve of $17,814,153 at the end of fiscal year 2027, with $130,930 in reserve contributions.
Within the general fund, staff project $9,835,976 in current property tax revenue, $14,000,000 in sales tax revenue and $2,140,000 in utility franchise revenue. The city also projects $1,161,650 in municipal court fines, $946,500 in permits and licenses and $8,608,587 in intra-governmental revenue.
What the city expects to spend
The largest spending category in the all-funds summary is salary and benefits at $33,968,175. Other major categories include service and utilities at $13,440,630, administrative reimbursements out at $11,715,201, utility fund debt payments at $9,327,963 and transfers to capital at $9,771,121.
In the general fund alone, salary and benefits are listed at $23,375,949. That figure includes $927,567 for new position costs and $892,778 tied to adjustments for step pay, cost-of-living increases and other personnel benefit changes. The same section projects $6,772,086 for services and utilities, $3,255,022 for maintenance of structures and improvements, $1,624,295 for supplies and $1,567,080 for insurance, sundry costs and elections.
The recommended general fund budget also includes $707,312 for capital equipment, $900,000 in transfers, $1,390,624 for transfer to internal service fund replacement purchases and $100,000 in reserves.
Those numbers suggest city staff are trying to balance everyday operating needs with longer-term replacement and capital obligations rather than relying on one-time cuts to close the books. The recommended plan does not show a deficit in either the all-funds summary or the general fund tables provided in the posted budget document.
What comes next for residents and City Council
The city news page identifies the document as the City Manager's recommended budget, which means it is the starting point for public review and council discussion rather than the last word. For residents, the immediate takeaway is straightforward. The proposed plan would ask property owners to pay a higher city tax bill next year while city staff use those added dollars, along with sales tax, service charges and transfers, to support a balanced spending plan.
The budget also gives taxpayers a clearer benchmark for the debate ahead. If council members keep the proposed rate, the median homestead would see an estimated increase of $60.62 on the city portion of the tax bill. If they move closer to the no-new-revenue rate, that increase would largely disappear. If they move closer to the voter-approval rate, the increase would edge slightly higher than what the recommendation now shows.
For now, the recommended document puts the core issue in plain terms. Huntsville's next city budget is built on more tax revenue, a higher projected bill for the median homeowner and a full slate of operating, personnel, debt and infrastructure obligations that staff say need to be funded in fiscal year 2027.