SAN MARCOS CITY COUNCIL
The San Marcos City Council voted Tuesday to raise property taxes for the 2026 fiscal year from the current figure of 60.30 cents per $100 of taxable property to 65.15 cents.
After rejecting the 67.69 cent rate recommended by the city with four “no” votes. Saul Gonzales, Shane Scott, Matthew Mendoza and Lorenzo Gonzalez voted against the rate and Amanda Rodriguez, Alyssa Garza and Mayor Jane Hughson voted in favor. The council then voted 5-2 to approve the 65.15 cent rate, with Alyssa Garza and Lorenzo Gonzalez voting against it.
The 65.15 cent rate combines the No New Revenue rate of $64.96, first proposed by the city during June budgeting workshops, with an additional $2 million to accommodate a change in EMS services necessitated by the fragmention of the San Marcos-Hays County EMS partnership.
Since 1983, the San Marcos- Hays County EMS Association has provided am- bulance services to Kyle, San Marcos, Dripping Springs and rural areas across the county.
In November of 2024, North Hays County Emergency Services District 1, based in Dripping Springs, voted to terminate its contract with the San Marcos Hays County EMS Association in order to develop their own EMS program. ESD 9, based in Kyle, also plans to set up their own EMS program, leaving San Marcos with an uncertain future with regard to EMS staffing and vehicle/equipment needs.
The addition of $2 million allows the city some flexibility in planning for these changes in the EMS service model, said City Manager Stephanie Reyes.
The approved rate also includes “enough ongoing revenues to be structurally balanced” and provide “some funding for current and future needs,” according to a slide presentation by City Director of Finance Jon Locke.
However, a number of improvement projects included in the higher rate proposed by the city are not included at the approved budget level.
Among the one-time funding proposals specified by the city at the rejected 67.69-cent level include replastering the Rio Vista Park pool and foundation stabilization at the Price Center, as well as new park equipment and radio replacement for first responders. None of the tax proposals included money for the new City Hall.
Declining sales tax revenue and stagnant property tax growth, combined with higher personnel costs resulted in the higher budget needs, according to Reyes.
Sales tax revenue has been declining for the past several years, with the forecast sales tax revenue for FY 2026 expected to be lower than in FY 2023, according to Locke. “As with last year, the value of property tax revenue from new developments has only been enough to make up for the declines in value from existing properties.”
Gonzalez expressed his desire to stick with the No New Revenue rate of $64.96 first proposed by the city during June workshops. He also stressed the need to diversify the tax base in the San Marcos area so that new economic projects in the area share more of the tax burden.
“Homeowners, renters and small businesses will continue to shoulder the cost of a growing city … (we should) stop listening to people that don’t live in the city and stop financing our city on the backs of our actual residents,” Gonzalez said.
In voting against the top rate recommended by the city, council member Matthew Mendoza also recommended finding new revenue sources. “We need to start focusing on how we’re gonna get money. We keep seeing the sales tax drop and drop and drop. And this is affecting, let’s forget about corporations, this is affecting our small businesses we have downtown.”
