Tyler’s proposed budget explores new ways to meet community needs

Published on August 12, 2026

The City Council is expected to hold public hearings on the proposed budget and tax rate on Aug. 26 and Sept. 9. Final consideration of the Fiscal Year 2027 budget and property tax rate is anticipated on Sept. 9.

The City of Tyler’s proposed Fiscal Year 2027 budget continues to strengthen investments in the services and infrastructure residents rely on every day, while planning for major equipment, facility, and infrastructure needs in the years ahead.

The proposed $287 million budget invests in public safety, streets, drainage, water and wastewater systems, and quality of life. It also addresses rising operating costs and identifies ways to make City operations more efficient and financially sustainable.

“Tyler has built strong momentum by staying focused on the services and infrastructure our community depends on,” said Mayor Stuart Hene. “This proposed budget keeps that momentum moving forward while making responsible decisions about how we invest for the future.”

Property Tax Overview

Tyler continues to have one of the lowest property tax rates in the State of Texas. The proposed property tax rate is a half-penny increase to 24.2063 cents per $100 of taxable value, compared with the current rate of 23.6452 cents.

At the proposed rate, the owner of an average Tyler home would pay approximately $693 in City property taxes for the year. That is an increase of about $48 annually, or $4 per month. The City expects to collect approximately $33.53 million in property tax revenue, an increase of about $1.71 million.

Property taxes account for about 32% of General Fund revenue. Sales tax remains the largest source of funding for the General Fund, which supports Police, Fire, Parks, Streets, Traffic, the Library, Municipal Court, and Animal Services. Sales tax revenue for FY 2027 is budgeted 2% above the current-year forecast.

All but two cents of the property tax rate funds Police’s and Fire’s emergency response operations. The remaining two cents are dedicated to maintaining City streets.

Planning for Public Safety Needs

The proposed budget continues investments in Police and Fire equipment and facilities.

The Police Department would receive $523,768 for the fifth year of the AXON subscription program, which provides equipment including body cameras, in-car cameras and Tasers. For the Fire Department, the Half-Cent program includes $8 million for the demolition and reconstruction of Fire Station 2 and $5.8 million for construction of a Fire Training Facility.

The City is also planning for approximately $12.3 million in major Police and Fire vehicles and equipment that will need to be replaced as they approach the end of their useful service lives. The identified needs include six fire engines, two ladder trucks and several specialized Police vehicles.

More Street Work With City Crews

The proposed budget would establish a new City street crew to assist with crack sealing and base repairs that are currently contracted.

Bringing this work in-house is expected to allow the City to complete approximately 7.68 additional lane miles through the annual asphalt enhancement program and 16.9 additional lane miles through the crack seal program. The change is also expected to save approximately $200,000 in the first year, with greater savings anticipated in future years.

Proposed quote: “Responsible budgeting also means looking for opportunities to work more efficiently,” Hene said. “If we can complete more work, improve service, and reduce costs over time, that puts the City in a stronger position to keep investing in the services our residents rely on while at the same time preparing for the City’s future.”

The Quality Street Commitment Fund would provide approximately $1.5 million for crack sealing, $869,772 for brick street repairs and maintenance, and $165,000 for public alley repairs and maintenance. The budget also proposes technology already installed on City vehicles to help identify and prioritize potholes, pavement deterioration and other roadway concerns.

The proposed budget also provides $700,000 for stormwater capital projects and $5.8 million in Half-Cent funding for drainage projects.

Investing in Water and Wastewater Service

Tyler Water Utilities would continue investing in equipment and infrastructure that help protect water quality and provide reliable service.

The proposed budget includes $13.6 million in cash-funded capital improvements, including approximately $6.83 million to replace variable frequency drives at Lake Tyler, $3.55 million for improvements at the Westside Wastewater Treatment Plant, approximately $2.52 million for the Southside Wastewater Treatment Plant aeration basin, and $700,000 for meters and meter boxes.

Additional operating investments would improve water-quality monitoring and protect critical equipment. Because the capital projects are cash-funded, the City can make these improvements without issuing additional debt specifically for this work.

The proposed budget also continues the transition toward uniform water and wastewater volume rates. Most residential water customers are not expected to be affected by changes to the higher-use tiers because they typically use less than 25,000 gallons per month. For residential and commercial customers inside the City, the water rate for the first 25,000 gallons would remain $3.75 per 1,000 gallons. The transition primarily affects commercial and industrial customers with higher water use.

Residential wastewater customers would continue to have wastewater volume charges capped at 10,000 gallons, meaning most residential customers would also not be affected by changes to the higher wastewater usage tiers.

The transition toward uniform volumetric rates promotes water conservation and is important for the City’s eligibility for improved bond interest rates and grant funding through the Texas Water Development Board.

Utility Bill Changes

The regulatory compliance fee would increase to pay debt issued for projects required by the Federal Government under the wastewater consent decree. The fee would increase by $5 on Oct. 1 and another $5 on Jan. 1, bringing the total monthly fee to $36.17. Another increase is expected in FY 2028, as a result of any debt approved by the City Council related to the Consent Decree in FY 2027.

The proposed budget would also change how stormwater fees are calculated beginning Jan. 1, 2027. Currently, the fee is based on 7% of a customer’s water, sewer and irrigation charges.

The proposed method would instead be based on the amount of hard surface on a property, such as roofs, driveways, sidewalks and parking lots. One equivalent residential unit, or ERU, would represent 3,454 square feet of hard surface and cost $4.90 per month. The change is intended to more closely connect the fee to the amount of stormwater runoff a property creates rather than the amount of water the customer uses.

“This stormwater fee change is about protecting the residential customers,” said Mayor Hene. “The cost should reflect the impact a property has on the stormwater system, so residential customers are not adversely affected, effectively subsidizing larger commercial or industrial properties that create significantly more runoff.”

Planning for Sustainable Solid Waste Operations

For the Solid Waste Department, the proposed budget provides a path toward more sustainable operations while continuing to provide high-quality service at a reasonable cost to residents.

The City is evaluating how Solid Waste services are delivered and funded to support the department’s long-term financial health. Several options remain under consideration, and no operational changes would take effect before Jan. 1, 2027.

The proposed budget also includes $130,000 for new route software. The technology will provide better information to manage routes, improve efficiency and support more informed operational decisions.

“Being responsible with City resources means looking beyond a single budget year,” Hene said. “We have to make sure the services residents count on remain reliable and affordable while building operations that are financially sustainable for the future.”

Investing in Tyler’s Quality of Life

The proposed budget includes $802,500 for improvements at Stewart Park and funding to replace the chiller at the Glass Recreation Center. It also recommends bringing a mowing crew back in-house, a move expected to provide greater control over scheduling and save over a quarter of a million dollars annually by 2029.

As work progresses on the Downtown Improvements Project, the budget includes $252,232 for maintenance of completed areas funded by Downtown’s Tax Increment Reinvestment Fund. Additional investments are planned at the Rose Complex, including continued improvements at the Tyler Rose Garden, former fairgrounds and Rose Garden Center.

Next Steps

More information about the proposed budget and upcoming public hearings will be available at CityofTyler.org. To view the property tax calculator, visit Smith.TruthInTaxes.com.

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Proposed 2027 Budget