Pearland proposes balanced FY 2026-27 budget, discusses pay raises, new property tax rate

PEARLAND, Texas -- Pearland officials are proposing a balanced budget of nearly $137.8 million for fiscal year 2026-27, following a budget presentation to City Council at its Aug. 24 workshop.

City officials are also proposing a tax rate of $0.627892 per $100 valuation of a home, city documents show.

Budget explained

The proposed FY 2026-27 budget includes approximately $137.8 million in both expenses and revenue, according to city documents.

Compared with FY 2025-26, the proposed budget represents a nearly 4% increase in both revenues and expenses, city documents show.

What residents need to know

The proposed property tax rate is $0.627892 per $100 home valuation, documents show.

This rate includes $0.351681 for maintenance and operations, or M&O, which funds daily operations, and $0.276211 for debt service, which primarily funds capital improvement projects.

For a property with a taxable value of $379,925, the annual property tax bill is around $2,380, city documents show.

The budget also reflects the impact of Proposition 9, approved by Texas voters in November 2025, which increased the property tax exemption for qualifying business personal property from $2,500 to $125,000, city documents show.

In 2026, taxable value increased by about 1.9%, while the exempted value increased by more than 52.7%, with more than $170 million in additional property removed from the tax rolls. The widening gap is becoming an increasingly significant factor in the city's budgeting and revenue forecasting, city staff said.

Also of note

The proposed budget includes several employee compensation increases, including civil service officers who would receive a 4% raise in October, followed by another 3% raise in April 2027, at an estimated cost of $1.3 million, city documents show.

Fire marshal employees would receive a 3% step increase and a 2% market adjustment, which will cost the city about $35,000, documents show.

Other exempt and non-exempt city employees who are not on the police or fire pay plans would receive a 2% market adjustment, estimated to cost $650,000, documents show.

Stay tuned

City Council is scheduled to hold a public hearing and consider the first reading of the FY 2026-27 budget and property tax rate ordinances on Sept. 14. The second reading is scheduled for Sept. 28, according to city documents.

This article comes from our ABC13 partners at Community Impact Newspapers.