The Amarillo City Council has finished its latest budget process, and the final numbers present residents with a familiar contradiction: the city’s property tax rate is staying the same, but that doesn’t mean the city is collecting the same amount of money — or that household costs are standing still.
Council members voted 4-1 Tuesday to adopt Amarillo’s over $600 million dollar fiscal year 2026/2027 budget and approve a total property tax rate of $0.43070 per $100 of taxable value. Councilmember Les Simpson cast the lone vote against both measures.
The rate itself is unchanged from 2025. But because property values and the tax base have changed, the budget is expected to generate $2.06 million more in property tax revenue than last year, an increase of 2.58%. About $1.3 million of that additional revenue will come from new property added to the tax rolls.
The adopted rate includes $0.32412 for maintenance and operations and $0.10658 for existing debt.
Under the city's calculations, the tax rate effectively represents a 2.9% increase and will raise maintenance and operations taxes on a $100,000 home by about $9.
That distinction matters. Keeping the nominal tax rate unchanged gives the city a straightforward talking point, but homeowners ultimately care about the amount appearing on their tax bills, not simply the number attached to the rate.
Property taxes also aren't the only place residents could feel the new budget.
The budget includes an 11% increase in water and sewer fees. Eight percentage points are intended to support capital improvements, while another 3% will go toward debt service connected to a $60 million loan for the Hollywood Road Wastewater Treatment Facility project.
For a typical residential customer with a 5/8-inch meter using 10,000 gallons per month, the full increase appears to amount to roughly $4.89 more per month for water and $4.50 more for sewer.
Those aren't enormous amounts when viewed individually. Add them together over a year, however, and the additional utility expense becomes more noticeable — particularly when combined with property taxes and other rising household costs.
There is also a legitimate reason behind the city's concern about its water infrastructure.
Assistant City Manager Donny Hooper told the council that staff has identified approximately $247 million in needed water and sewer projects separate from the wastewater treatment facility projects. That includes replacing water mains dating to the 1940s and upgrading lift stations.
“Do as much as we can this year, try to come up with a new budget next year. But these are all real things that are in front of us that we don’t want to come back to council and say, ‘Well, you know, we didn’t ask for it, and now it’s all broken, and we don’t know how to fix it,’” Hooper said.
That's the difficult part of the budget debate. Aging infrastructure doesn't become cheaper by ignoring it. Delaying necessary water and sewer work can simply leave future councils — and future taxpayers — with larger bills.
At the same time, an 11% utility increase deserves scrutiny, especially when the city is still waiting for additional information about exactly what rates are necessary.
A consulting firm is studying Amarillo's water and wastewater rates while also reviewing an internal utility billing audit. More information is expected to come before the council in October.
Mayor Cole Stanley raised the possibility Tuesday that rates could be reduced if the study determines the full 11% increase isn't necessary to pay for capital projects and prepare for future wastewater expenses. He also suggested reconsidering the city's water-use tiers and potentially creating another tier that rewards conservation.
That review should be taken seriously. If updated numbers show residents can be charged less without putting critical infrastructure at risk, the council should follow through with a reduction rather than simply allowing the higher rate to become the new normal.
Councilmember David Prescott, however, warned that Amarillo has major water expenses ahead, including the possibility of another Canadian River Municipal Water Authority pipeline.
“We have to be able to weather all economic conditions with the most valuable resource we have,” Prescott said.
The budget also puts additional money into city employee compensation. Civilian employees are scheduled to receive a 3% cost-of-living adjustment, while sworn police and fire personnel will receive a 4% salary increase. Funding also covers a 1% merit increase for civilians, certificate-pay adjustments for sworn employees, five additional pay steps for police officers and salary adjustments for some civilian positions following an earlier compensation study.
Another $100,000 has been reserved for future use benefiting senior citizens.
Simpson's opposition was consistent with the position he took earlier in the budget process: he said he would not support a tax rate that failed to provide property tax relief.
That leaves Amarillo residents with two competing realities.
The city has aging infrastructure, expensive water projects, employee compensation pressures and public safety needs that require money. Those costs are real, and pretending otherwise would only push difficult decisions into future budgets.
But residents also have reason to question how much more they should be expected to absorb at once.
A tax rate that stays the same while generating more revenue is not the same thing as tax relief. An 11% utility increase is still an 11% increase, regardless of how necessary the underlying projects may be.
The most important part of Tuesday's vote, then, may come after the budget has already been adopted.
When the water-rate study returns to the council, city leaders will have an opportunity to demonstrate that the increases were based on what Amarillo actually needs rather than simply what the budget could accommodate. If the numbers justify the full increase, the city should clearly explain why. If they don't, council members should lower it.
