Amarillo taxpayers will have to wait a few more days to learn what the city’s property tax rate could look like after errors were discovered in calculations being used during the 2026-2027 budget process.
The Amarillo City Council has scheduled a special meeting for 11 a.m. Monday, Sept. 14, in Room 3400 at City Hall. Council members are expected to discuss recalculated property tax figures and consider a proposed tax rate for maintenance and operations and debt service.
Normally, another budget meeting might not attract much attention outside City Hall. This one deserves a closer look.
After months of staff preparation and more than a dozen hours of council budget workshops, city officials acknowledged Tuesday that errors had been identified in tax-rate calculations presented during the process. The discovery prevented the council from moving forward with a decision on the maximum rate it could ultimately adopt.
The potential good news for taxpayers is that the corrected numbers could give the council considerably more financial flexibility than members previously believed.
The concern is how the city got this far into one of its most important annual responsibilities without council members having confidence in the figures in front of them.
Tax relief has been a major part of the discussion
Council members have spent much of this budget season trying to balance competing priorities.
They have discussed lowering the tax burden on residents while also providing raises for city employees and first responders, hiring additional staff, pursuing projects and maintaining or increasing city services.
Those decisions depend heavily on how much revenue different property tax rates would generate.
Notices attached to agendas for budget workshops in mid-August listed a proposed tax rate of $0.44728. By Tuesday, the rate was listed as $0.44744.
The larger issue emerged as council members explored the possibility of adopting the no-new-revenue rate.
On Aug. 25, city staff told the council its calculations showed that adopting the no-new-revenue rate would remove approximately $3.4 million from estimated general fund revenue.
That would have presented council members with a significant budget challenge. Finding millions of dollars in tax relief while also increasing employee compensation, adding staff or expanding services could have required reductions or compromises elsewhere.
But subsequent information from the Potter and Randall County tax assessors and the city’s bond counsel indicated the calculations needed another look.
The updated information suggested the 2026 no-new-revenue rate might not produce the multimillion-dollar reduction in general fund revenue that staff had previously projected.
Errors discovered in the calculations
Mayor Cole Stanley began questioning the figures after examining what the city had been told about the voter-approved rate.
According to Stanley, council members had difficulty understanding how the voter-approved rate presented in August would generate only about $700,000 in additional revenue given the city’s taxable values.
Stanley compared information provided by bond counsel with numbers contained in the city’s budget book and found that they did not appear to match.
He asked city staff to recheck the figures between Tuesday morning’s budget workshop and that afternoon’s regular council meeting.
City Manager Grayson Path later informed the council that staff had identified errors that needed to be corrected in both the no-new-revenue rate and voter-approved tax rate. Staff requested more time to work through the calculations, leading to Monday’s special meeting.
Stanley said an excess debt collection estimate had been sent to both Potter and Randall counties. He said correcting the figures could ultimately produce a $4 million to $6 million difference in the amount of money available for council priorities such as police, fire, employee pay and city services.
If that estimate holds after the numbers are verified, it could substantially change the final budget discussion.
Instead of working from an assumption that adopting the no-new-revenue rate would reduce estimated general fund revenue by approximately $3.4 million, council members could have considerably more flexibility as they decide how to balance tax relief with spending priorities.
Why the calculations matter
The no-new-revenue and voter-approved tax rates are two of the options available to taxing entities.
The no-new-revenue rate is calculated so that a taxing entity does not raise more property tax revenue than it did in the previous year. The voter-approved rate separates the calculation into maintenance and operations and interest and sinking components, with the maintenance and operations side increasing by 3.5%.
The voter-approved rate represents the highest rate the city can adopt without voter approval.
Debt is included in the interest and sinking portion of the tax rate calculation. According to the information presented during the city's discussion, if that amount declines because of roughly $3 million identified in excess collections, the maintenance and operations portion of the no-new-revenue calculation increases.
That, in turn, could mean more money available for the general fund than council members originally thought.
For taxpayers, the practical consequence could be significant. Correcting the calculations may give the council more room to consider tax relief while still funding employee compensation, public safety and other city services.
But exactly how much flexibility exists will depend on the recalculated figures presented Monday.
Council members want answers
There is also an accountability issue that should not be overlooked simply because correcting the calculations could result in a favorable financial outcome.
A municipal budget is one of the most important policy decisions a city council makes each year. Property tax calculations determine both what residents and businesses are asked to pay and how much revenue elected officials have available for city operations.
Those numbers need to be reliable before council members vote.
Councilmember Don Tipps made clear Tuesday that he was not comfortable deciding on a rate without knowing the correct figures.
Councilmembers Les Simpson and Tim Reid also expressed frustration and confusion about the process.
Simpson questioned why information from the counties and bond counsel was not available for the council to examine as members worked through the issue. He also raised concerns about council members independently communicating with other taxing entities when not everyone involved in the budget discussion appeared to have access to the same information.
Reid similarly indicated that the council was in no position to adopt a figure Tuesday when members themselves did not know what the correct numbers were.
Those concerns are understandable.
Council members should be able to see where the numbers originate, understand how they were calculated and compare them with information from the counties, bond counsel and previous city collections before setting a tax-rate ceiling.
At the same time, finding the problem before the council takes final action is preferable to discovering it after a tax rate has been adopted.
The appropriate response now is to verify the corrected calculations rather than rush through another set of numbers because a deadline is approaching.
Monday's meeting takes on added importance
The council had been scheduled to vote Tuesday on a not-to-exceed tax rate.
That vote essentially establishes the highest tax rate the council could later adopt. Council members could ultimately approve a rate below that ceiling, but not one above it.
Without confidence in the underlying calculations, the council postponed that decision.
Councilmember David Prescott, who was out of town, participated in Tuesday's budget workshop by video conference. He was not present for the regular council meeting later that day.
The council will now reconvene Monday to hear the recalculated figures and consider the not-to-exceed rate.
Stanley has indicated that confidence in the new numbers should come from verification rather than simply accepting another calculation. The figures are expected to be checked using information involving Potter County, Randall County, the city's bond counsel, city staff and previous-year actual numbers.
That verification is particularly important after the figures have changed during the budget process.
If the corrected calculations show the city has millions of dollars more flexibility than previously projected, council members will face a different budget question than they did just days ago.
They will have to decide how much of that flexibility should translate into property tax relief and how much should be directed toward employee compensation, public safety, staffing and other city priorities.
There are legitimate arguments to be made over those choices.
What should be less controversial is the need for council members and taxpayers to have accurate numbers before those decisions are made.
Monday's special meeting gives the city an opportunity to provide those numbers, explain what went wrong and show how the corrected calculations were reached.
