Lakeway residents could see the city portion of the property-tax bill rise by about $78 a year on an average-value home under the maximum rate being considered for 2026.
City Council voted 5-2 on Aug. 17 to set a not-to-exceed rate of $0.1760 per $100 of taxable value. That figure is a ceiling rather than a final decision, and the council can approve a lower rate when it completes the budget process in September.
How the proposed rate compares
Lakeway's current rate is $0.1696 per $100, while the calculated no-new-revenue rate is $0.1670. The city has set the maximum at $0.1760, which also matches its stated de minimis rate before an election would be triggered under the applicable tax rules.
The average Lakeway property value has increased from $842,697 to $857,615. If the maximum rate is adopted, the city estimates the owner of an average-value property would pay approximately $78 more a year to Lakeway.
The calculation relates only to the city share of the bill. Lakeway says its portion represents about 9% of the total property tax paid by an average owner, with other taxing bodies accounting for the remainder.
Why Lakeway faces a budget gap
City staff identified a projected gap of almost $1.5 million between revenue and spending for fiscal 2027. The council's published explanation attributes much of the pressure to lower permit-fee income as Lakeway approaches build-out, alongside reduced revenue from dispatch services and other factors.
Officials have developed a three-year approach with more than 140 possible cost-saving measures. They are options under discussion, not a confirmed list of cuts.
Examples include reducing or removing some community events, scaling back activities connected with National Night Out and public-safety programs, reducing staffing or training in several departments, ending the police K9 program, and lowering spending on street striping, water-quality pond work and landscaping.
The city says property-tax income supports services including police, local roads, parks, code compliance, building inspections, permitting, solid-waste services and community events. The final package will determine how the council balances those services against the projected shortfall.
When residents can comment
A public hearing on the proposed budget and tax rate is scheduled for Tuesday, Sept. 8 at 6:30 p.m. at Lakeway City Hall. A second hearing is scheduled for Monday, Sept. 21 at 6:30 p.m., when the council expects to vote on both the fiscal 2027 budget and the final 2026 tax rate.
Because the final rate has not been adopted, residents should not treat the $78 estimate as a confirmed bill increase. The City of Lakeway budget and tax-rate notice provides the official figures, hearing details and links to its property-tax calculator.
