During budget discussions at the Aug. 5 City Council meeting, Lakeway City Manager Joseph Molis proposed that the council adopt a tax rate of .1625 for the 2024-25 fiscal year, just below the .1626 rate that would need to be approved by voters. The proposed rate, an increase from the .1440 tax rate in 2023-24, would generate over $650,000 in revenue for the city, Molis said.
The 2025 tax rate, which brings in no new revenue and is 0.1408 and does not take into account the recently approved $22 million park bond, would cost the city $3,500, Molis said. The no new revenue tax rate is the rate that brings in the same property tax revenue as last year. Adjusted for the bond, the no new revenue tax rate is 0.1545, but Molis suggested the council choose a tax rate closer to the rate approved by voters of 0.1626.
“When you as a council start discussing the difference between adopting the rate with no new revenue taking into account the parking bond (0.1545) and adopting the rate approved by voters, you’re talking about an impact of $5.50 a month for the average household. But that equates to almost $650,000 in revenue for the city,” Molis said.
The council will vote on the proposed tax rate at its August 19 meeting.
Taxes collected by the city of Lakeway account for about 8% of residents’ property taxes, with the Lake Travis School District accounting for 61% and Travis County accounting for 17%, officials said.
Molis also spoke about the long-term capital improvement program, which involves putting large sums of money into a capital reserve. The reserve would serve as a means of financing major city projects and would be an alternative to issuing bonds. The capital reserve is just over $8 million.
“We’re trying to move the city from just bailing out and issuing bonds to finance big projects to putting together a multi-year capital improvement program, and to do that, it has to be funded,” Molis said.
The capital improvement program is part of Lakeway’s comprehensive development plan, which includes improvements and maintenance of land use, roads and mobility, infrastructure and community spaces.
In 2025, the city will use the capital reserve for information technology improvements, battery backups for police, a sewer study, a drainage study and road and drainage projects, officials said.
During budget discussions, Molis also highlighted that property values have increased by $47,000 in the past year. The average price of a home has increased from $780,000 to $827,000. He said newly built homes are more expensive than older developments.
