September 3, 2026 – September is a busy time for Texas municipalities as this is the month of finalizing their budgets and finalizing the tax rates for the upcoming year. The timing and protocols are set by the state as well as the wording on how the motions are voted on for changing the tax rate. This wording became problematic during Tuesday night’s meeting as state of Texas mandates to say the tax RATE is going up when actually it is the overall dollar income that the city collects is going up as the tax rate is actually going down slightly. This phenomenon is nothing new as municipalities battle these calculations every year and are restricted to collect a maximum increase of 3.5% more in total dollars than they did the previous year. With the value of taxable properties on the rise, the 2027 year tax collection would increase by more than the 3.5% so the upcoming tax rate needs to adjusted down slightly to stay under the 3.5% increase limit. To make matters even more confusing, the city could attempt to leave the tax rate at the same level, but since that would exceed the 3.5% year over year collection limit, voter approval would be required.
I am sure that every current city council member completely understands all of the dynamics of the tax rate calculation, but the wording confused those in attendance from the public. The current tax rate for City of Sulphur Springs stands at 0.4392 and is proposed to be lowered slightly to 0.43894 per $100 of valuation. This new tax rate will still produce an INCREASE of the amount of money the city takes in for next year over this year.
As the motion to pass the tax rate was read in compliance with the state mandate, the crowd erupted as the wording included the phrase “tax rate be increased” when in fact the tax rate was going down ever so sightly. One public forum member spoke to the council urging the council to roll back the tax rate to what is called the “no new revenue” rate which is a calculation of the new tax rate to be lowered to a level when multiplied with the current higher appraised values would yield a collected income for the city exactly the same amount as previous year.
If any of this sounds confusing, you are not alone. The short answer for the City of Sulphur Springs tax rate for this year, is that on the First Reading of Ordinance #2904 the new lower tax rate passed although slightly with a vote of 4-3. The council will have a special meeting scheduled for September 16, 2026 for the Second and Final Reading of Ordinance #2904.
