Round Rock homeowners are looking at a higher city tax bill next year, with council members setting a proposed maximum property tax rate of $0.423 per $100 of valuation for the fiscal year that starts in October. That rate is $0.051 higher than the current $0.372 rate and sits precisely at the highest level the city can propose without triggering an automatic public election.
The proposed rate would fund Round Rock's $684.1 million budget and help cover bond debt, maintenance and operations, and bond-funded construction projects, according to Community Impact, which first reported on the council's action. Reporter Brooke Sjoberg noted that city staff had signaled residents would likely see a higher tax rate as additional fire department staff and new facilities come online in fiscal year 2026-27. The proposed rate is also $0.038 higher than the no-new-revenue rate, which is the rate that would raise the same amount of tax revenue as the previous year.
For context, a homeowner with a median taxable value of $370,288 could pay $1,566 in annual city taxes under the proposed rate. The $0.423453 figure represents Round Rock's calculated voter-approval tax rate, a ceiling set under Texas Tax Code Section 26.04, which limits how much maintenance and operations revenue a taxing unit can raise annually without asking voters to approve going higher.
Falling Home Values Meet Rising Public Safety Costs
Part of what's driving the increase is a shrinking residential tax base. In a July financial presentation, Round Rock Chief Financial Officer Kevin Klosterboer reported that residential property values in the city dropped 6%, even as commercial property valuations keep climbing toward a projected $30 billion by 2031, the same report notes. Meanwhile, the city's overall population continues expanding by about 3% annually, adding roughly $2 million in new property tax revenue each year as fresh residential developments land on the tax rolls.
The proposed budget includes additional personnel primarily for increased fire department staffing and a new recreational facility, and the general fund plan for fiscal year 2026-27 sets aside approximately $6 million in base salary increases, with most of that going to public safety personnel across the fire and police departments. Public safety personnel costs represent a substantial share of the city's annual operating expenditures, per city budget documents.
Fire Stations Rising Under the 2023 Bond Package
Much of the new spending traces back to the $274 million general obligation bond package Round Rock voters approved in May 2023, which set aside $230 million for parks, recreation, and sports along with $44 million for public safety facilities. Two concrete examples are moving forward now: Fire Station 10, a $9.1 million facility serving fast-growing northeastern Round Rock near Paloma Lake that's set to open this fall, and Fire Station 11 at University Boulevard and Seton Parkway, which received a $10.5 million construction contract approval in May.
Hoodline covered a related bond project tied to the same 2023 package. The fire staffing debate itself isn't new to Round Rock politics; in April, city staff estimated that meeting proposed NFPA 1710 staffing benchmarks under a May ballot measure known as Proposition B could require raising the tax rate by 11.6 cents to $0.488 per $100 valuation by 2034, with cumulative costs reaching $179.5 million in operating expenses plus $48.7 million in capital costs.
Sales Tax Still Cushions the Blow
Sales tax remains Round Rock's primary revenue source, making up roughly 45% of its general budget, and a dedicated half-cent of the city's 2% local sales tax is set aside specifically to lower property tax rates. That allocation reduced the city property tax rate by 11.8 cents in fiscal year 2025-26 alone, saving the median homeowner about $39 a month, or 24%, on the city portion of their bill. The city also channels sales tax revenue collected above an internal cap into a General Self-Financed Construction Fund, letting it build roads, parks, and other capital projects in cash rather than issuing new voter-approved debt.
Even with the proposed increase, municipal property taxes account for less than 20% of a typical Round Rock homeowner's total annual property tax bill, with local school districts claiming the largest share. That distinction matters this fall: Round Rock ISD set its own proposed rate of $0.9848 per $100 valuation in August and called a November Voter-Approval Tax Rate Election seeking a 6-cent increase above its base rate to raise teacher starting pay to $58,000, meaning residents will weigh two separate tax proposals within months of each other.
What Happens Next
The Round Rock City Council is scheduled to hold its first vote on the tax rate on August 27 at 6 p.m., followed by a required second reading on September 10. Until those votes are finalized, the $0.423 figure remains the maximum the council can adopt without calling a public election, though members could still choose a lower final rate.
