The Victoria City Council approved the budget and tax rate for fiscal year 2026 at a specially called meeting Sept. 9 following weeks of discussion on how best to fund City programs and services in a fiscally responsible manner.
The new budget will go into effect Oct. 1.
What’s in the budget
Some of the projects included in the budget are:
- A historic $5.5 million investment in employee compensation, prioritizing first responders, utility workers and other critical positions.
- $79.25 million for capital improvement projects such as the Victoria Community Center expansion and renovation as well as 18.5 miles of street repairs. The capital improvements budget also includes design work on Guy Grant and on the first phase of North Street (in front of Patti Welder Middle School).
- $8.34 million for vehicles, including police cars, ambulances, fire trucks and garbage trucks.
- A $600K bond redemption program to pay off debt ahead of schedule, which will provide greater financial flexibility in years to come.
About the tax rate
The tax rate approved by City Council is $0.4790 per $100 of property valuation, an increase of $0.0083 compared to the FY2025 tax rate.
Due to declining property values and a shortage of new developments, an increased rate was needed to bring in enough revenue to fund the historic pay program and other key projects. Council agreed on the $0.4790 rate after discussions amongst themselves and with City staff.
Lowering the tax rate by growing Victoria
During budget discussions at previous meetings, council members and staff acknowledged that growth, in the form of new taxable residential or commercial property value, is the crucial element that allows taxing entities to maintain or lower their tax rates amid declining property values.
Minimal new development (growth) and decreasing property values have been consistent factors during years when the City has had to consider increasing the tax rate due to financial constraints. The last time those factors occurred was during the two-year period after Hurricane Harvey, and the City increased the tax rate then as well.
Victoria has attracted multiple commercial developments in the past year, including the new Amazon fulfillment center, that arrived too late to be reflected in this year’s tax roll but will be included next year.
City leaders will continue to pursue growth strategies to attract new development to Victoria, which will help to ensure adequate property tax revenue while minimizing the impact on existing taxpayers.
To learn more about the City’s efforts to attract new development, visit www.growingvictoriatx.com.
Learn more on Town Talk
City Manager Jesús Garza appeared on the City of Victoria’s Town Talk podcast to discuss details of the newly adopted budget, including the pay program, street projects and the connection between property taxes and growing Victoria.
To learn more, watch or listen to the latest episode of Town Talk on YouTube at Victoria Texas Videos or on Spotify at Town Talk (City of Victoria).