Residents in Canyon will see higher property tax bills next year after city commissioners voted Tuesday to approve a 30 percent increase in the tax rate for the 2025–2026 fiscal year. The decision comes as Canyon works to balance rising operational demands with new long-term debt tied to voter-approved projects, while also advancing plans for downtown improvements.
The vote followed two earlier budget hearings, held August 12 and 19, where city staff explained the financial needs driving the increase. Officials said the higher tax rate is essential to maintain city services, fund new public safety positions, and pay debt obligations from the bond measure approved by voters in May.
The new tax rate is set at $0.51181 per $100 of valuation. That figure combines two components: the maintenance and operations (M&O) rate of $0.39420, which covers day-to-day services, and the interest and sinking (I&S) rate of $0.12141, which goes directly to paying off issued bonds.
Canyon’s 2024 tax rate was $0.41011, meaning residents will see an increase of just over ten cents per $100 valuation. While the change is steep by percentage terms, city leaders stressed that much of the increase comes directly from the May bond election that voters approved.
What the Increase Means for Homeowners
For the average homestead property, the annual tax bill will rise by about $304, according to Budget and Purchasing Manager Beau Boyer. Of that total, $67 will fund operations, while $236 will be used for debt service.
Boyer emphasized that the calculation was made using certified property values from the Potter-Randall Appraisal District, ensuring residents have a clear picture of the real-world impact.
“After using the average homestead property value provided by PRAD, the increase in payment for the average home is going to be $304 for the year. $67 of that is going to be used for operations; $236 of that annually is going to be used to service debt,” Boyer said during Tuesday’s meeting.
The debt portion stems directly from the public safety facility bond, passed by voters earlier this year. The bond funds a new multi-purpose facility for police, fire, and animal control services. Officials say the project will modernize Canyon’s public safety operations, improve the city’s ISO rating—which helps keep homeowners’ insurance premiums lower—and address long-term facility needs.
“In order to address those needs for our growing community, our ISO rating to keep insurance premiums down, and to meet the need for animal control, now was the time to make this change,” Boyer said.
A Split Vote
The tax increase passed on a 3–1 vote. Commissioner Place 4 Robyn Cranmer made the motion to approve the new rate. Commissioners supported it, except for Commissioner Place 3 Paul Lyons, who voted against. Mayor Pro-Tem Cody Jones was absent.
City officials noted that the adopted rate is just below the highest level Canyon could set without triggering another election. Under Texas law, most municipalities cannot raise property tax revenue by more than 3.5 percent without voter approval. However, because Canyon’s population is under 30,000, a “de minimus rate” applies, allowing the city to adopt a higher rate so long as it does not exceed a threshold equal to $500,000 of new M&O revenue.
By staying below that cap, commissioners avoided calling a special election while still raising sufficient revenue to cover both bond payments and operations.
Where the Money Will Go
The increase will fund several targeted priorities beyond the bond obligations. Canyon plans to:
Add school resource officers to strengthen campus safety.
Hire a new part-time firefighter to support emergency response.
Provide merit raises for staff to retain skilled employees.
Officials argue these steps are necessary as Canyon grows and service demands rise. City staff pointed to competitive labor markets in police, fire, and municipal operations, noting that without modest raises, Canyon risks losing employees to larger cities in the region.
