Every year, the Amarillo City Council wrestles with one of the most important and difficult tasks of local government: how to fund essential city services while balancing the needs of residents and the realities of rising costs. This year is no different — but the challenges seem bigger, the stakes higher, and the decisions tougher.
With a proposed budget of nearly $570 million for Fiscal Year 2025-26, city leaders face a complex puzzle. How do you keep streets safe and well-maintained? Hire enough police and firefighters? Upgrade infrastructure for a growing population? And how do you pay for it all without overburdening taxpayers?
The answer isn’t simple. But understanding the facts — and the choices ahead — helps us all get on the same page.
The Big Picture: What Does Amarillo’s Budget Do?
City Manager Grayson Path described the budget as a “blueprint,” but importantly noted it’s not a fixed plan, but a starting point for discussion.
“The proposed Fiscal Year 2025/2026 budget totals $569.6 million,” Path said, “It funds more than 250 programs and services, supports nearly 2,400 full-time employees, and reflects our continued effort to deliver core services, address emerging needs, and respond to the priorities of our community and this governing body.”
This gives you a sense of the scale. Amarillo runs a huge range of programs — everything from public safety and parks to water and sewer services, libraries, animal control, and emergency communications. The city employs almost 2,400 people to make this happen.
But that kind of operation doesn’t come cheap. This year’s proposed budget is 14.1% higher than last year, largely because of inflation, population growth, and rising costs for materials, labor, and technology upgrades.
Rising Costs and Increasing Demands
It’s no secret that everything costs more these days — construction materials, fuel, software licenses, and even employee salaries. Amarillo isn’t immune to this trend. The city must keep up with new challenges like cyber security, maintain and upgrade aging infrastructure, and make sure public safety departments can recruit and retain skilled personnel.
For example, the budget proposes raises of 5% for police officers and 4% for firefighters to stay competitive in the job market and keep these critical services staffed.
Assistant City Manager and CFO Laura Storrs broke down some key investments:
Capital Projects: Funding street repairs, wastewater treatment plant design, replacing aging equipment, and fire apparatus.
Employee Compensation: A 2% cost-of-living increase plus merit raises for civilian employees, and improved retirement benefits.
Utility Fee Increases: Proposed increases to solid waste (7%), water and sewer rates (5%), and a potential new street maintenance fee.
Property Taxes: Balancing Revenue Needs with Fairness
In Texas, property taxes are the backbone of city revenue. They pay for police, fire, streets, parks, and administration. But raising property taxes is always controversial, so the state puts limits on how much cities can increase rates without voter approval.
Amarillo’s No-New-Revenue (NNR) Rate keeps property tax revenue flat despite changes in property values. The Voter-Approval Tax Rate (VATR) allows cities to raise the maintenance and operations portion of the rate up to 3.5% without calling an election.
This year, Amarillo’s proposed tax rate is $0.43070 per $100 valuation, up from $0.38723 last year. For the average homeowner, that means about an $11 annual increase.
Mayor Cole Stanley explained his view on tax increases:
“I am in favor of looking and seeing like where the value of that money is going, and what can we do with that? So if it hits our top two priorities, and it’s what it’s going to cost to run the city, then yes, I think we need to charge everything that we can charge in order to take care of business.”
The Street Maintenance Fee Debate: A Necessary Evil?
One of the most hotly debated parts of the budget is the proposed street maintenance fee. Amarillo’s streets department has seen a 67% increase in road mileage to maintain since 2018, but lost eight full-time positions. Current funding just doesn’t cover the needs.
Assistant City Manager Donny Hooper explained:
“The proposed fee would create a dedicated $15 million fund for street repairs and operations, moving the street maintenance budget into its own enterprise fund.”
This fee would be billed monthly on utility bills — starting at about $3 per month for residential customers, and higher for commercial properties based on a “trip factor” that measures road wear from different land uses.
City Manager Path emphasized the need for a reliable revenue stream insulated from property tax caps:
“The reality is, if we don’t raise taxes or fees, something is going to suffer. If we do, we can at least keep pace with what our citizens expect. Using reserves would only work for a year — it’s not a sustainable solution.”
Yet not everyone agrees. Mayor Stanley opposes the fee, worrying about the burden on residents and businesses:
“If we have to raise fees every time we want to fix a problem, we’re not looking hard enough at our priorities. We should explore other funding sources before creating new charges.”
Councilmember Les Simpson, meanwhile, acknowledges the complexity:
“I wish money went as far as it used to. When you combine inflation, state limits on our revenue, and the needs of a growing city, the math just doesn’t work the way it once did. We need to have an honest discussion about what it really takes to maintain the services people expect.”
Staffing and Services: Growing Needs, Limited Resources
The budget calls for adding 44 new full-time positions, focusing on public safety, animal control, and the 311 hotline, which handles non-emergency calls.
Police and fire departments not only get new positions but also raises to help with recruitment and retention:
Police get a 5% raise
Firefighters get a 4% raise
City departments continue to juggle growing demands with staffing shortages and budget constraints.
Councilmember Don Tipps captured the challenge:
“There’s just so much. Now we’ve got a time deadline that we’re against and we’re faced with. And I appreciate you recognizing the fact that we’re in an impossible situation with this council.”
David Prescott echoed this:
“It’s a very complex budget. There are so many services and service lines in different aspects to this budget. It’s a lot, but it’s complicated, but I have full faith in our staff right now. The council is in a tough spot right now. With the revenue that we have to spend, so we’re going to have to make some hard decisions to get through this.”
Capital Projects: Investing in Amarillo’s Future
The budget allocates $113.5 million for capital improvements — vital to modernize infrastructure and support growth. Highlights include:
Wastewater Treatment Facilities: $25 million for design and planning of new or expanded plants.
Street Repairs: $2.5 million for milling, filling, and arterial reconstruction.
Public Buildings: $1.8 million to replace the Downtown Library roof and HVAC, plus funds for City Hall upgrades and demolition of the old building.
Public Safety Equipment: Funds to improve police department infrastructure and warning siren systems.
Parks and Solid Waste: Investments in equipment and dumpsters to maintain services.
Revenue Gains and Challenges
Officials expect a net increase of about $9 million in revenue from:
Property taxes: $3.8 million
Sales taxes: $2.7 million
Solid waste fees: $2 million
Building permits and other sources make up the rest.
However, Amarillo will lose $1.4 million in federal transit grants due to population growth — ironic, but a real hurdle as the city outgrows programs meant for smaller places.
Debt and Legislative Pressures
Amarillo begins the new fiscal year with $554.6 million in outstanding debt, possibly rising to $603 million with new planned issuances.
Texas Senate Bill 9 threatens to lower the allowable tax rate increase without voter approval from 3.5% to 2.5%, further restricting revenue growth just as Amarillo joins the population category affected.
This will make fee revenues and budget cuts even more critical.
The Road Ahead: Hard Decisions and Public Input
The council has postponed the final vote to give members more time to weigh cuts if the street maintenance fee is dropped. Staff need clear guidance on where to trim the budget without that revenue.
Councilmember Prescott acknowledged the difficulty:
“I think we’re going to have to make some hard decisions. But I have confidence that with input from the council and the community, we can find the right balance.”
Mayor Stanley remains hopeful:
“We’ve identified more needs and bigger dollar items than what we anticipated. That’s not abnormal, and so there’s no quit in this council or this staff. We’ve got a strong year ahead of us, and we need to plan for growth, and we need to plan for prosperity, and both of those are what we’re seeing coming.”
What Amarillo Residents Should Know
The proposed budget aims to balance competing demands amid rising costs and growth pressures.
Property taxes will increase slightly, adding about $11 per year for the average homeowner.
Utility fees for water, sewer, and solid waste will also rise.
The new street maintenance fee is controversial but aims to provide a sustainable funding source for critical repairs.
The council must decide whether to accept the fee or find cuts elsewhere.
Public input and transparency will be essential before the final budget vote expected in September.
Final Thoughts: Why This Matters
Municipal budgeting might not make headlines every day, but it profoundly affects daily life. From safe roads and clean water to timely emergency response, these are the services residents count on.
Amarillo’s City Council and staff are navigating a difficult path — balancing fiscal responsibility with the community’s expectations. Their decisions will shape the city’s future for years to come.
Understanding the facts, engaging in public discussion, and supporting common sense solutions can help Amarillo thrive amid change.
Amarillo 2025–26 Budget: Your Questions Answered
Q1: How much is the proposed budget?
The city plans to spend about $570 million, supporting nearly 2,400 employees and more than 250 programs and services.
Q2: Why is the budget increasing?
Costs are rising due to inflation, population growth, and increased demands for services like public safety, infrastructure, and technology upgrades.
Q3: Will my property taxes go up?
Yes. The proposed tax rate would increase from $0.38723 to $0.43070 per $100 valuation, raising the average homeowner’s city property tax bill by about $11 annually.
Q4: Are there any fee increases?
Yes. Solid waste collection fees may rise by 7%, water and sewer rates by 5%, and a new street maintenance fee is proposed ($3/month for residents, higher for businesses).
Q5: What is the street maintenance fee? Why is it needed?
The city’s street department lost staff while road mileage increased 67%. The fee would create a dedicated fund for street repairs and upkeep, providing stable funding outside of property taxes.
Q6: Is everyone in the City Council supporting the street fee?
No. Some, like Mayor Cole Stanley, oppose it due to concerns about burdening residents and businesses, while others see it as necessary to maintain infrastructure.
Q7: How is public safety addressed?
The budget includes raises for police (5%) and firefighters (4%) and proposes new hires to maintain staffing levels amid a competitive labor market.
Q8: What about capital projects?
$113.5 million is allocated for infrastructure projects including wastewater treatment design, street repairs, public building upgrades, and parks improvements.
Q9: Will the city’s debt increase?
Potentially. Amarillo currently has $554.6 million in outstanding debt and could add about $7.5 million more for fleet and equipment replacements.
Q10: What external factors impact the budget?
New state legislation (Senate Bill 9) could reduce allowable property tax increases without voter approval, putting more pressure on fees and cuts.
Q11: When will the final budget be approved?
The City Council postponed final approval to allow more discussion and will vote in September after considering public input and possible budget adjustments.
