The Amarillo City Council wrapped up its final budget session of the season on Tuesday, moving one step closer to finalizing a budget for the upcoming fiscal year. After weeks of workshops, debates, and back-and-forth over proposed fees and spending priorities, the Council approved a tax rate not to exceed $0.43070 per $100 of property valuation and set a public hearing on the rate for Sept. 16.
The session focused on balancing new cost pressures—like employee raises and rising utility costs—against residents’ concerns about additional fees. In the end, councilmembers chose to avoid adding a new vector control fee, relying instead on reserves, while still moving forward with modest increases in solid waste, water, and sewage rates.
Highlights of the Proposed Budget
Here are the major takeaways from Tuesday’s session:
Proposed property tax rate: $0.43070 per $100 valuation (the voter-approval rate).
Utility fee increases: 7% increase in solid waste collection fees, and 5% increase in water and sewage fees.
Employee raises: Police officers to receive a 4% raise, firefighters 3%, and civilian employees a 2% merit raise.
No new fees: No street maintenance fee and no vector control fee at this time.
A Closer Look at Employee Raises
Employee compensation has been one of the central issues throughout the budget process. Amarillo, like many Texas cities, has faced challenges retaining public safety officers in the face of competitive job markets.
Earlier in the year, City staff presented a plan to dedicate $2.2 million from a pay study to boost salaries across the board. That proposal included a street maintenance fee to help cover costs. However, after residents and councilmembers pushed back against the idea of another monthly fee, the council asked staff to return with alternative solutions.
On Tuesday, Chief Financial Officer Laura Storrs explained how staff identified extra revenue sources and savings to make raises possible without the fee.
Among those adjustments:
$383,000 in additional revenue from higher-than-expected landfill usage.
Around $700,000 from raising golf course green fees by $2 and considering—but not ultimately approving—a vector control fee.
Department-level cost savings, including trimming technology spending.
Together, these changes allowed the City to support:
A 4% raise for police officers (up from 3% originally proposed).
A 3% raise for firefighters (up from 2%).
A 2% merit or cost-of-living adjustment for civilian employees.
$505,000 in overtime pay for police and fire officers.
$900,000 for information technology upgrades (half the originally budgeted $1.8 million).
While not the full amount originally envisioned in the pay study, the raises reflect a compromise between fiscal restraint and the need to remain competitive in employee pay.
Solid Waste and Utility Fees
Another focus of the budget session was utility and solid waste collection fees.
The Council approved a 7% increase in solid waste collection fees, split 75% to commercial customers and 25% to residential customers. Officials noted that commercial growth, including increased landfill usage, has created new cost pressures for the City’s solid waste division.
Separately, water and sewage fees will increase by 5%. City staff said the increases were necessary to keep up with rising operating costs, maintain infrastructure, and ensure cost recovery in those departments.
Notably, there will be no street maintenance fee in this budget. Staff had initially suggested it as a dedicated funding source for road repair and upkeep, but councilmembers decided against implementing it this year.
The Vector Control Fee Debate
One of the most debated topics at Tuesday’s session was whether to impose a new vector control fee—a 50-cent monthly charge on water bills that would cover the City’s mosquito abatement and related services.
Currently, vector control is funded out of the City’s property tax revenues. By moving it to a dedicated fee, staff argued, the program could operate on a cost-recovery model, freeing up general fund dollars for other uses.
But Mayor Cole Stanley pushed back on the idea, saying he preferred finding other ways to recover costs rather than adding another charge to residents’ utility bills.
Councilmember David Prescott of Place 3 expressed support for the fee, noting that residents already benefit from mosquito abatement and should see the value in a direct funding model. However, the majority of the council—including members Tim Reid (Place 1), Don Tipps (Place 2), and Les Simpson (Place 4)—favored tabling the proposal for now.
Instead, the council opted to cover the roughly $311,000 in projected revenue from the fee by drawing from reserves.
Property Tax Rate: Breaking It Down
Perhaps the most consequential item Tuesday was the council’s decision to approve a proposed property tax rate not to exceed $0.43070 per $100 valuation.
Understanding the Numbers
Property tax rates in Texas are divided into two components:
Maintenance & Operations (M&O): Covers day-to-day expenses like salaries, public safety, and city services.
Interest & Sinking (I&S): Pays the principal and interest on bonds and other city debts.
Amarillo’s proposed rate of $0.43070 is exactly equal to the voter-approval tax rate (VATR)—the highest rate the City can adopt without triggering an election.
Here’s how it compares to past and alternative rates:
No-New-Revenue Rate (NNR): $0.37355 per $100 valuation. This rate would bring in the same revenue from existing properties as last year.
Last Year’s Rate: $0.38723 per $100 valuation.
Proposed VATR: $0.43070 per $100 valuation.
This means the average Amarillo homeowner will pay about $11 more on their City property tax bill compared to last year.
Within the new rate:
The M&O portion rises slightly, from $0.31867 to $0.33114.
The I&S portion rises more significantly, from $0.06856 to $0.09956, reflecting debt obligations.
Reserves and One-Time Projects
Another feature of Amarillo’s budget process is its practice of coming in under budget each year. When departments spend less than allocated, the leftover funds roll into capital projects the following year.
The proposed budget includes over $2 million in reserves. As noted earlier, Mayor Stanley recommended using part of those reserves to cover the projected revenue from the shelved vector control fee.
This strategy gives the City flexibility but also signals that the council remains cautious about layering on new charges to residents’ monthly bills.
State Legislation Could Shift Future Tax Rules
One cloud hanging over Amarillo’s budget decisions is the prospect of new state legislation tightening property tax caps.
Currently, cities and counties in Texas can raise property tax revenue by up to 3.5% before triggering a voter approval election. But during the Legislature’s ongoing special session, Senate Bill 10 was refiled to lower that threshold to 2.5%.
An amendment adopted in the House would cut the limit even further, to just 1%. If approved, this change could dramatically restrict local governments’ ability to adjust tax rates in response to rising costs.
For Amarillo, which has already adopted the voter-approval rate this year, such a law would mean less flexibility in the future. It would also heighten the importance of reserves, fees, and alternative revenue streams like landfill and golf course income.
What Comes Next
The City Council’s vote on Tuesday does not finalize the budget but sets the maximum tax rate under consideration. The public hearing on the rate is scheduled for Sept. 16, where residents will have a chance to voice their opinions before the council takes final action.
In the meantime, city staff will continue refining details of the budget, and residents can expect to see finalized numbers for utility fee increases and employee compensation in the adopted budget.
A Balancing Act
Tuesday’s meeting underscored the balancing act that Amarillo, like many Texas cities, faces each budget season.
On the one hand, residents want well-maintained streets, reliable city services, and competitive pay for the public safety officers who protect them. On the other hand, they are wary of additional fees and higher property taxes, particularly in a period of rising costs of living.
By tabling the street maintenance and vector control fees, the council signaled that it is listening to concerns about affordability. At the same time, by approving raises for police, firefighters, and civilian employees, it acknowledged the City’s responsibility to invest in its workforce and maintain service levels.
As Mayor Stanley pointed out, the City must continually evaluate how it funds core services. “Cost recovery” can take many forms—whether through fees, reserves, or tax rates—and the choices Amarillo makes today will shape its flexibility in the years ahead.
