Page 32 - CityofSouthlakeFY26AdoptedBudget

Ad Valorem revenues in the FY 2026 budget are
based on a tax rate of $0.295 per $100 valuation.
This rate is lower than last year’s rate of $0.305,
reducing the rate by 1 cent. The tax rate of $0.295
is split between General Fund operations and debt
service. The allocation for FY 2026 is $0.24 for
general operations and $0.055 for debt service.
The FY 2026 reduction has been taken from the
operations portion of the rate.
As shown in Figure 8, Southlake’s calculated voter-
approval rate is higher for FY 2026 than the current
Budget Overview
adopted tax rate. Therefore, the tax rate is not
subject to an automatic election.

The ongoing use of the 20% homestead exemption
will complement the current over-65 exemption
of $75,000, disabled exemption of $75,000, and
the over-65 tax freeze. The continuation of these
exemptions offers additional tax relief.

A 20% homestead exemption will reduce the taxable value of an average-valued home in Southlake by
$222,617. The property owner of an average-valued home will see the equivalent of a tax rate reduction of
approximately 5.9 cents per $100 valuation with the exemption applied.

With the homestead exemption in place, and considering the tax rate reduction, the equivalent residential
tax rate on an average-valued home is $0.236.

Figure 9 reflects how the City has provided tax relief through the homestead exemption and adjustments
to the property tax rate to conservatively manage taxes paid by property owners.

Sales Tax Revenues
In Southlake, the total sales tax rate is 8.25%. Of that, the City receives $0.02 of sales tax for every dollar
spent in our city limits (the remainder goes to the State). One of those pennies goes to the General
Fund and can be spent on general operating costs, like supplies, salaries, and general maintenance. The
other penny is split between our Crime Control and Prevention District (CCPD), the Southlake Parks
Development Corporation (SPDC), and the Community Enhancement and Development Corporation
(CEDC). The money collected in these districts can only be used for the purposes outlined in the original
referendum presented to the voters, so we set up separate funds to account for the revenues and
expenditures of each unit. Later sections of this overview provide details about these specific funds
and investments for FY 2026.

Figure 8
Tax Rate Comparison
Fiscal Year Tax Rate No New Revenue Rate Voter Approval Rate

2025 $0.305 $0.305956 $0.385397
2026 $0.295 $0.274049 $0.364506
Comparison of tax rate, no-new-revenue rate, and voter-approval rate. Note the voter-approval rate is adjusted for unused increment credit.
32 FY 2026 City of Southlake | Budget Book FY 2026 City of Southlake | Budget Book 33