Sep 18, 2025

Southlake City Council Adopts FY 2026 Budget

Balanced Finances, Strong Services, and the Lowest Tax Rate in Nearly Four Decades

On September 16, 2025, the Southlake City Council formally adopted the FY 2026 budget, reinforcing the City’s reputation for disciplined financial stewardship while delivering meaningful tax relief for residents.

The adopted budget lowers the property tax rate for the 15th time since 2009, setting it at the lowest level in almost 40 years, all while sustaining award-winning services, protecting reserves, and funding long-term priorities.

“For more than a decade, Southlake has paired tax relief with service excellence,” said Mayor Shawn McCaskill. “The FY 2026 budget builds on that record—reducing the rate once again while ensuring that Southlake remains safe, well-maintained, and financially strong.”

Tax Relief for Residents

The Council’s adoption of a property tax rate of $0.295 per $100 of taxable value delivers the 15th tax relief initiative since 2009 and sets the rate at its lowest point in just under four decades.

Southlake homeowners also continue to benefit from some of the most generous exemptions allowed under state law:

20% homestead exemption (the maximum allowed by law)
$75,000 over-65 exemption
$75,000 disability exemption
Over-65 tax freeze, which locks the City portion of the tax bill from increasing

Taken together, these exemptions save the average homeowner thousands of dollars each year. The homestead exemption alone reduces the taxable value of an average-valued home by more than $222,000, equivalent to an additional 5.9 cent tax rate reduction.

“Reducing the tax rate is one of the most direct ways we can give back to our residents,” said City Manager Alison Ortowski. “We work hard to maintain the highest quality services at the lowest possible cost.”

Balanced and Sustainable

The FY 2026 operating budget continues Southlake’s tradition of structural balance, ensuring that recurring expenses are matched to recurring revenues. This approach provides stability for day-to-day operations and capacity for future investments.

“This is how we make sure our commitments to residents are sustainable year after year,” said Chief Financial Officer Sharen Jackson. “We don’t use one-time money to pay for ongoing expenses. That’s how we keep our finances resilient, even when the economy changes.”

The budget also maintains the City’s 25% General Fund reserve, equivalent to $14.4 million. This optimum reserve level provides the ability to respond to emergencies, absorb economic fluctuations, and seize opportunities without compromising service delivery.

Debt Management and Long-Term Planning

Since 2010, Southlake has reduced its property tax-supported debt by 62%, with all current property tax-supported debt on track to be retired within seven years. Even with more than $120 million in capital projects planned for the next several years to support the City’s infrastructure, the City will continue to manage borrowing carefully, keeping debt service costs low and preserving flexibility for future needs.

“These shifts in revenue as we approach build-out are exactly why we maintain strong reserves and manage our debt so carefully,” Jackson noted. “They give us the flexibility to adapt without compromising service quality.”

What This Means for Residents

For residents, the adopted budget means:

Continued tax relief and a historically low rate.
Stability in core services such as public safety, infrastructure, parks, and community amenities.
Confidence that the City is planning responsibly for the long term.

“Strong finances are the foundation for everything else we do,” said Mayor McCaskill. “It’s how we protect our quality of life, keep Southlake safe, and invest in the amenities that make our community exceptional.”