City of Allen Approves FY 25-26 Budget and Lowers Property Tax Rate
The City of Allen has officially approved its budget and tax rate for the 2025-2026 fiscal year, continuing a long-standing trend of financial discipline. The Allen City Council voted on September 9 to reduce the city’s property tax rate, focusing on balancing resident affordability with critical investments in public safety and community infrastructure.
Tax Rate Reduction and Resident Impact
The City Council approved a reduction of the property tax rate to 41.54 cents per $100 valuation. This is a slight decrease from the previous rate of 41.75 cents. To further mitigate the impact of rising home values, the city maintains a 5% city homestead exemption.
This move is part of a broader historical trend; for over 30 years, Allen has consistently reduced its tax rate, a feat that is rare among Texas cities. Mayor Baine Brooks highlighted that this strategy, combined with low rates for water, sewer and solid waste, positions Allen as one of the most affordable cities in North Texas.
Budget Allocations and Public Safety
The 2025-2026 budget involves approximately $349 million in expenditures. Property taxes are a significant funding source, accounting for 47.6% of the budget—an amount specifically designated to cover public safety services, including police and fire departments.
To bolster these services, the budget includes the addition of approximately 17 full-time equivalent employees. Key additions include:
- Three police officers
- Three firefighters/paramedics
- Two detention officers
- A two-member trail maintenance crew
Revenue Streams and Economic Strategy
The city expects to collect nearly $150 million in general fund revenue for the coming year, marking a 4% increase over the current year. Even as property taxes provide nearly half of this revenue—aided by an 8% increase in assessed property values—other services are funded through different channels.
Parks, trails, library services, and public works are funded via:
- Sales tax (projected to rise 2%)
- Franchise fees
- Licenses and permits
- Charges for services
City Manager Eric Ellwanger noted that the city is pursuing “smart commercial development” to increase sales tax revenue from out-of-town visitors. This strategy aims to shift the financial burden away from local residents who pay property taxes.
Key Takeaways: Allen FY 25-26 Budget
| Category | Detail |
|---|---|
| Recent Property Tax Rate | 41.54 cents per $100 valuation |
| Total Expenditures | Approximately $349 million |
| General Fund Revenue | Nearly $150 million (4% increase) |
| Fiscal Year Start Date | October 1 |
| Primary Tax Focus | Public safety (police and fire) |
Looking Ahead
As the city enters the new fiscal year on October 1, leadership remains focused on managing a population that could exceed 117,000. The budget reflects a “community in transition,” prioritizing infrastructure improvements—particularly along the Highway 121 corridor—to keep pace with growth while maintaining a trajectory of tax reduction.