Commissioners record $40.947 million proposed budget

Gonzales County commissioners unanimously recorded the proposed $40,947,817.91 fiscal year 2026 budget into the minutes at their Monday, Aug. 25 meeting.

Commissioners are set to hold a 9 a.m. public hearing on the budget and the proposed tax rate of 26.89 cents per $100 valuation on Tuesday, Sept. 2.

County Judge Pat Davis officially filed the budget on Friday, Aug. 15, in accordance with state law, but the court must also record the proposed budget into its minutes prior to holding a public hearing on it. The budget is not officially adopted until a final voice vote is taken by commissioners to approve it after the public hearing.

The new budget calls for an increase in expenditures of $13,335,797.64 above the $27,612,020.27 budgeted for fiscal year 2025. Of that amount, $10,579,000 is for the construction at the Gonzales County Annex building, while $2,013,367 is for the first year of seven years of debt service that will be used to pay back the $11.78 million tax note the county sold in April 2025.

It also includes $236,311 for a newly created Juvenile Probation Department, $45,500 for Help America Vote Act election security requirements and a $1,300 stipend for every county employee, with general fund expenditures overall up by $956,129.61.

Meanwhile, the budget calls for $25,199,119.08 in revenues for fiscal year 2026, up from the budgeted amount in 2025 of $21,523,519.54 but less than the actual amount received so far in 2025 of $34,129,333.98, which includes the net $12,265,240.74 the county received from the sale of the tax note.

Revenue for fiscal 2026 includes collection of $2,013,367 in taxes for debt service, a $42,950.00 HAVA grant and an additional $1,751,502.78 in general fund revenue to cover anticipated expenses.

The proposed tax rate of 26.89 cents is equal to the voter approval tax rate and represents an increase of 6.57 cents above the 2024 tax rate of 20.32 cents and 5.86 cents above the 2025 no-new-revenue rate of 21.03 cents.

The no-new-revenue rate is defined as is the tax rate for the 2025 tax year that will raise the same amount of property tax revenue from the same properties as it did in the 2024 tax year. The voter-approval rate is the highest tax rate the county may adopt without holding an election to seek voter approval of the rate.

Normally, under a state law passed in 2019, the county can only increase the maintenance and operations (M&O) portion of the tax rate by a maximum of 3.5 percent each year without seeking voter approval.

However, if the county does not increase its tax rate above the no-new-revenue rate, it can bank what is called an unused increment that can be used at a future date based on the prior three years of “foregone tax revenue.”

Since 2021, the county tax rate has dropped from 43.91 cents to 20.32 cents in 2024, a decrease of 23.59 cents per $100 valuation as the county has only adopted the no-new-revenue rate each year and mineral and property valuations have jumped significantly.

This year, the tax rate will jump by nearly a third — 32.33 percent — because the county will be cashing in that unused increment to exceed the 3.5 percent cap and the county will have debt service to pay for the first time in seven years due to the bonds issued to fix the annex and Randle-Rather building.

However, since the new tax rate is at the voter-approval rate based on factoring in that unused increment, the county will not be required to hold a tax rate election, though it must hold a public hearing on the rate for residents to voice their opinions.

The average homestead taxable value has risen from $155,290 last year to $167,607 this year, which is an increase of 7.93 percent. By increasing the tax rate from 20.32 to 26.89 cents, the tax on the average homestead will increase by $135.15, from $315.55 to $450.70, this year, while the total tax levy on all properties will rise from $14,227,199 to $18,312,083, an increase of $4,084,884.