City weighs higher tax rate

By Anthony Collins

LPR Editor                      

   Lockhart residents could see a higher City property tax bill next year as the City Council works through a budget that includes major facility projects, infrastructure needs, employee pay adjustments and future public safety costs.

   The City is considering a voter-approval tax rate of $0.6200 per $100 of taxable property value for Fiscal Year 2026-27. The current rate is $0.5541. According to figures provided by the City, the median-valued homestead in Lockhart was $273,784 in 2025. At the current tax rate, that property carried a City tax bill of $1,517.04.

   For 2026, the median-valued homestead dropped to $265,725. Even with that decrease in value, the estimated City tax bill would rise to $1,647.50 if the $0.6200 voter-approval rate is adopted. That works out to an increase of $130.46 for the year on the City’s median-valued homestead. City officials have also estimated the increase at roughly $145 per year, or about $12 per month, on a home valued around $265,000. The exact amount would depend on the property’s taxable appraised value. The proposed budget would raise $712,954 more in total property taxes than last year’s budget, an increase of 10.78 percent. Of that amount, $300,825 is expected to come from new property added to the tax roll this year. The remaining increase would come from the existing tax base.

   Several large projects are helping drive the higher costs. The City is moving forward with a new aquatic center and recreation center, improvements at Lions Park and City Hall, and the purchase of property for a future police station. The budget also includes the need to adjust employee salaries as Lockhart competes with other communities and employers for workers.

   City officials have said those projects are considered needs rather than wants and point to Lockhart’s history of using certificates of obligation, or COs, to pay for major capital improvements. COs allow a city to borrow money for certain projects and repay that debt over time. The debt payments are reflected in the interest and sinking portion of the City’s tax rate.

   That distinction is important when looking at the state’s 3.5 percent property tax revenue limit. The 3.5 percent cap applies to the maintenance and operations portion of the tax rate. The interest and sinking portion, which is used to repay debt, is not included in that cap. City officials say the Council has spent considerable time discussing the projects and the financial impact on residents. They have also said the decision to move several projects forward at the same time was made in part because delaying them could mean paying more later as construction and material costs continue to rise. City officials acknowledge that the increase comes at a time when residents are already dealing with higher costs in many parts of their household budgets.

   Another number in the discussion is the no-new-revenue tax rate of $0.5452 per $100 of taxable value. At that rate, the estimated City property tax bill on the median-valued $265,725 homestead would be $1,448.73. At the voter-approval rate of $0.6200, the estimated bill would be $1,647.50. That is a difference of $198.77 for the year.

   The no-new-revenue rate is designed as a benchmark showing roughly what rate would be needed to collect the same amount of property tax revenue from properties taxed in both years, after changes in property values are taken into account. New property added to the tax roll is handled separately. The City’s financial needs are not limited to new facilities.

   Street maintenance remains one of Lockhart’s largest long-term challenges. The City recently purchased a chip spreader, allowing crews to take on more street maintenance work in-house. Even with that step, City officials estimate Lockhart has more than $60 million in street needs. That has led to discussion that a street bond could eventually be placed before voters.

   City leaders have said previous councils were often hesitant to raise taxes and that some major needs were delayed as a result. Their position is that continuing to push projects into the future could leave future councils facing even higher costs. The Council has also maintained that the process has been discussed openly during public meetings and that residents have had opportunities to provide input.

   For homeowners, the final tax impact will depend on individual property values and exemptions. The figures provided by the City also represent only the City of Lockhart’s portion of a property tax bill. Caldwell County, Lockhart ISD and other taxing entities set their own rates separately. Still, the numbers give residents a clear picture of what is being considered. The City’s median-valued homestead has dropped in value from $273,784 to $265,725, but under the proposed voter-approval rate, the estimated City tax bill would still rise from $1,517.04 to $1,647.50. At the same time, the City would collect 10.78 percent more in total property taxes than under last year’s budget, with part of that increase coming from new development.

   The issue now before the City Council is how much additional revenue is needed to handle current services, major capital projects, employee costs and future infrastructure needs without pushing too much of that burden onto taxpayers. For Lockhart residents, that debate will eventually come down to a simple question: whether the higher tax bill is worth the projects and services the City says the additional revenue will support.