KATY, Texas — City staff are recommending Katy maintain its property tax rate at 42.5 cents per $100 of property value in the upcoming fiscal year, which avoids a tax increase.
While the tax rate would remain unchanged, the city projects municipal revenue will climb about 8% due to continued residential and commercial development that has expanded the city's tax base.
The recommendation comes as part of a proposed $74.54 million municipal budget for fiscal 2025-26 that represents a 5.2% reduction from current spending levels, according to budget documents presented to City Council.
Spending priorities outlined
Public safety dominates the proposed general fund budget, accounting for nearly $26 million of the $55 million total.
The allocation breaks down to about $14.5 million for police operations and $11.5 million for fire services.
The budget proposal shows significant shifts in other areas, including a 76% boost for information technology upgrades and a 45% reduction in contingency reserves.
City staff have outlined $5.5 million in equipment and infrastructure purchases including:
- $1.8 million for a fire truck
- $110,000 for additional fire department equipment
- $438,800 for police vehicle replacements
- $1.5 million for substations at Texas Heritage Marketplace
Separately, water system improvements totaling $1.45 million would be financed through utility revenue rather than property taxes. The largest water project involves $800,000 for emergency power and pumping equipment at the city's third water treatment plant.
Council review process
City Council will hear public input on the budget proposal during a Sept. 8 hearing at 6:30 p.m. at City Hall, 901 Ave. C.
A second public hearing focused on the tax rate is scheduled for Sept. 22 at 6:30 p.m., with council expected to vote on final budget adoption immediately following the hearing.