Council approves tax rate on the first of two readings
San Marcos City Council voted unanimously to approve the tax rate at 60.3 cents per $100 of taxable value on the first of two readings at the regularly scheduled meeting Tuesday.
San Marcos Finance Director Jon Locke said the no-new-revenue rate, the rate that will produce the same amount of revenue as the previous fiscal year on properties taxed in both years, is 59.96 cents. The proposed budget rate, the rate used to prepare the Fiscal Year 2025 budget, is 60.3 cents, which is the same as the current rate. The voter-approval rate is 70.36 cents and exceeding that rate triggers an automatic election.
The proposed budget and recommended tax rate of 60.3 cents would give the city $52,074,830 of property tax revenue.
“The city council at the last city council meeting set the maximum proposed rate at 60.3 cents, so the rate that council ultimately sets has to be equal to or less than that tax rate,” Locke said. “If council were to adopt… the no-new-revenue rate that would be a reduction of $293,000 in revenue.”
Locke broke down the tax rate, showing what amount goes into the Operations and Maintenance and Debt portion of the tax rate. For FY2024, $0.4447 went toward operations and $0.1583 went toward debt for a total of 60.3 cents. For FY2025, $0.45 would go toward operations and $0.153 would go toward debt for the same total tax rate.
Locke said the average home value in San Marcos in 2024 was $338,218 and in 2025 the average home value is projected to be $365,422. When removing the homestead exemption of $15,000 that makes the taxable value for 2024 $323,218 and for 2025 $350,422. The average home value has gone up $27,204 from FY 2024 to FY 2025. The annual tax levy for 2024 was $1,949, which was a monthly cost of $162. The annual tax levy for 2025 would be $2,113, which would be a monthly cost of $176. That would be a monthly increase of $14.
“The annual savings that a homestead receives from the annual homestead exemption and that’s $90,” Locke said. “From Fiscal Year ‘24 to ‘25 that number jumped from 6,700 to 8,200, so it jumped about 1,500 homesteads. And that is just more people calling San Marcos home… The most recent change became effective in FY2023… You can see the impact that that had for the homestead. The total savings went from $300,000 to $1 million. That was $700,000 of savings, which is also $700,000 less revenue that the city brought in to provide those savings. In Fiscal Year ‘25 that amount is now $1.3 million, so since those changes have taken place the total amount of tax relief provided by those changes has grown by a million dollars.”
The council will have a final vote on the tax rate on Sept. 17.
