Amarillo City Council gives final approval to $557 million budget, raises property tax rate

After months of workshops, debate, and public hearings, the Amarillo City Council on Tuesday, September 16, gave final approval to the city’s $557 million budget for fiscal year 2025–26. Alongside the budget, the council approved a property tax rate increase that will generate nearly $8.5 million more in revenue compared to last year.

The vote caps weeks of discussion about how to balance Amarillo’s growing needs with rising costs that are straining both households and City Hall.

A Larger Budget to Meet Growing Demands

This year’s budget represents a nearly 12% increase over last year’s $499.3 million plan. It boosts spending on public safety, employee pay, infrastructure, and public health, while also funding long-discussed projects such as dangerous structure removal and expanded solid waste services.

“The money is there, it’s now stewardship,” Mayor Cole Stanley said after the final vote. “We need to steward those moneys well, and we need to continue to make sure we’re getting value for those dollars, and then by the end of this year we can be accountable to our taxpayers and to our voters.”

The council’s decision raises the city’s property tax rate from $0.38 to $0.43 per $100 valuation, an increase of just over 15%. For the average homeowner with a $100,000 property, this translates to roughly $12 more per year in city taxes.

Councilmember David Prescott, serving through his first full budget cycle, noted the challenges of keeping up with inflation while meeting expectations for services.

“Costs have gone up, they’re going up in areas that we never expected and it’s putting a lot of strain on our personal budgets, our family budgets,” Prescott said. “It’s no different for the city.”

How the New Funding Will Be Spent

City officials emphasized that the budget increases were not about expanding government for its own sake, but about maintaining core services, improving employee compensation, and keeping pace with Amarillo’s infrastructure demands.

Highlights of the budget include:

Public Safety: Funding for one new police officer, one new firefighter, and paramedic training. Police officers will receive a 4% raise and firefighters a 3% raise, though city leaders said these increases still fall short of what is needed to remain competitive.

Civilian Workforce: A 2% merit raise for civilian employees and partial implementation of a pay study aimed at improving compensation across departments.

Retirees: Cost-of-living adjustments for retired city workers under the Texas Municipal Retirement System.

Health Services: $1.4 million allocated to open a new Public Health Women’s Clinic.

Infrastructure: More than $30 million designated for street projects and $36 million for water and sewer upgrades, including federal grant funding to begin design of new wastewater facilities.

Solid Waste Services: Creation of a new team to remove dangerous structures and continued investment in a dumpster replacement program.

Mayor Stanley acknowledged that while the budget addresses many pressing needs, it leaves work unfinished in key areas — particularly in salaries for first responders and utility crews.

“It didn’t get to the level of raises, especially for those public safety first responders, that we wanted,” he said. “We need to continue to dig in on that and become more efficient so we can remain competitive with those salaries. And when we say public safety, we mean everyone who makes the city work — civilian staff, water crews, the folks who repair a line at two in the morning when it’s 20 degrees. They deserve competitive pay, too.”

A Closer Look at the Tax Increase

The property tax hike marks a reversal after two years of small reductions in the city rate. According to city officials, the change reflects flat or declining property valuations in parts of the city and the need to sustain services while still staying under the state’s 3.5% revenue cap on maintenance and operations.

The approved rate of $0.43 per $100 valuation will generate additional funds for operations, but councilmembers stressed that it remains comparatively low among Texas cities of similar size.

“The tax rate will raise more taxes for maintenance and operations than last year’s,” the city announced in a statement following the vote. By law, because the budget requires more property tax revenue than last year’s plan, the council also held a separate ratification vote to confirm the increase.

Prescott explained the situation bluntly: “There are so many needs and so many wants, but only a limited amount of dollars. Every vehicle costs more, gas costs more, food costs more. Everyone needs at least a cost-of-living adjustment just to keep from falling further behind.”

Balancing Expectations and Reality

Other councilmembers echoed Prescott’s point about managing expectations in an era of inflation.

Councilmember Les Simpson praised city staff for preparing a detailed spending plan and offering clear options but warned that the city cannot fund everything through property taxes alone.

“Staff did exactly what they’re supposed to do — they brought us a comprehensive budget and gave us solutions to consider,” Simpson said. “Even when the tax rate goes up, most citizens I talk to still expect more services, not less. Our job is to balance those expectations with the dollars we have and to find ways to fund government that don’t rely solely on property taxes.”

Simpson also urged the council to begin working earlier on next year’s budget to address long-term funding needs. “This year’s budget is solid, but we need to start the conversation now about how we continue to provide the services people want while keeping property taxes as low as possible,” he said.

Prescott expressed pride in how the council worked through disagreements to reach consensus. “I think that this council did a fantastic job, really diving in and looking at areas where we can maximize the limited amount of revenue that the city has,” he said.

What It Means for Residents

For the average homeowner, the approved tax rate means a modest increase of about $12 annually on a $100,000 property. While some residents may not feel the difference, others on fixed incomes or tight budgets may find it adds to an already heavy financial load amid inflation.

At the same time, city leaders argue that the increased revenue is essential to maintaining public safety, improving streets, replacing outdated water and sewer systems, and ensuring fair pay for employees who keep Amarillo running.

Mayor Stanley framed the trade-off in terms of stewardship and accountability: “The money is there. We need to make sure we’re getting value for every taxpayer dollar.”

A Budget Months in the Making

The council emphasized that the final document is the product of months of work. Workshops, hearings, and public input shaped the final outcome, even if not every priority could be fully funded.

“This budget is something we’ve worked on for months, and we’re proud of where we came out,” Prescott said.

The process also revealed areas where Amarillo must think longer term, from competitive pay to infrastructure resilience. Councilmembers said that planning beyond the one-year cycle will be critical if the city wants to avoid repeated tax increases.

Looking Ahead

The fiscal year 2025–26 budget will take effect October 1. With the ratification vote complete, the city is set to begin operating under the new plan immediately.

Unresolved issues, such as long-term salary competitiveness and strategies for diversifying revenue, will likely dominate discussions heading into next year’s budget season.

For now, Amarillo residents can expect modestly higher taxes, but also investments in police, fire, health services, infrastructure, and the city workforce.

As Mayor Stanley put it: “It’s now about stewardship. The money is there. We need to make sure we’re getting value for every taxpayer dollar.”