Texas homeowners were promised that the state’s expanded homestead exemption would cut their tax bills this fall. In the state’s largest cities, city halls are moving to take part of it back — and the reason is not a spending spree but structural budget deficits built over time.
County appraisal districts must deliver certified appraisal rolls to taxing units by July 25, six days from now, under the Texas Property Tax Code calendar maintained by the Texas Comptroller of Public Accounts. Those certified totals set the arithmetic for everything that follows: the no-new-revenue rate, which would raise the same revenue on the same properties as last year, and the voter-approval rate, the ceiling a city can adopt without an election. When taxable values fall, both rates rise mechanically — and a city can charge a higher rate while insisting it is not raising more money.
San Antonio is the clearest case. City officials are weighing the first property-tax rate increase in 33 years, driven by a projected budget deficit of about $264 million, according to KSAT, which reported the proposal. The San Antonio Report reported that taxable value on existing San Antonio properties fell about 3.54% when the city’s parcels are separated from countywide totals, and that for a home at the city’s median homestead value of $271,000, the increase would add roughly $2.82 a month, or $33.84 a year.
Even at the maximum rate the state allows, the city would still need to cut about $70 million over its next two budgets to stay structurally sound. Texas Public Radio reported in June that declining values have left nearly every large taxing entity in Bexar County short of revenue, prompting several to consider their first rate increases in years.
Austin City Manager T.C. Broadnax’s proposed $6.6 billion fiscal 2026-27 budget, released July 10, sets the city rate at the voter-approval maximum of 57.953 cents per $100 of value, up from about 52.4 cents — the highest rate available without a tax-ratification election. As The Texas Dispatch reported when the Austin budget landed, the median non-senior homestead would pay about $2,248 in city taxes, roughly $177 more than last year, even though taxable values are projected to decline.
The pattern matters because the state relief flowing to those same homeowners is narrow. Senate Bill 4 and the Proposition 13 constitutional amendment raised the school-district homestead exemption from $100,000 to $140,000 for tax year 2026, with an additional $60,000 for owners who are over 65 or disabled. The comptroller estimates average school-tax savings of about $560 a year. That exemption applies only to the school portion of a bill. Nothing in it restrains a city, county, hospital district or community college from raising its own rate — which is precisely what two of the state’s four largest cities are now proposing to do.
For taxpayers, the practical window is short and it opens next week. Once rolls certify July 25, taxing units must publish proposed rates alongside their no-new-revenue and voter-approval calculations and hold public hearings before adopting rates in August and September. Those notices are the only place a homeowner can see, in one line, how much of the state’s $140,000 exemption their own city intends to absorb.