Page 15 - Budget FY 2022-2023 - Update

Adopted Budget 2023 City of McAllen, Texas

McAllen Tax Rate; Overall Impact on Citizens’ Ad Valorem Taxes
This year, the city reduced its property tax rate to 0�4799 per $100 of valuation� This is a savings for taxpayers
after a year of rising inflation and energy prices. For property owners, the home is not only hearth and shelter but
also typically their biggest asset� Housing across the United States has seen rising interest rates and shortage of
inventory� As such, values of single-family homes have had notable increases� However, even with increased prices
locally, McAllen remains an attractive place to reside offering a high quality of life, but with costs of living much more
affordable than other metros in Texas and the rest of the nation�

McAllen share of the total local property tax rate is 0.4799 of ($2.4799 per $100) for only 19.35%

McAllen’s Share of Property Tax Bill

Overall revenues

In addition to the Sales Tax and Property Tax revenues, the City will continue to utilize dedicated revenue for specific
purpose� Details of this revenues are listed in the Executive Summary section on pages 17-20�

Another useful source of information for assessing the area’s economy is the McAllen Area Economic Pulse published
by the McAllen Chamber of Commerce, a copy of which has been included in the Supplemental Section of this budget,
pages 411-413 and includes data for the entire McAllen Metro of Hidalgo County, Texas� The report’s “Economic
Index” for the Metro has increased from 203�4 in 2021 to 219�6, mainly due to a continued slowly recovery from the
effects of Covid, and includes an increase in retail sales of 6�6%, airline boarding’s decrease of -6�6%, a decrease in
lodging tax receipts of -16�2%, an increase in motor vehicle purchases of 13�5%, and new home purchases down by
nearly -12%�

CURRENT YEAR ISSUES

This year, we are anticipating that General Fund revenues will increase by 4% over last year’s adjusted budget� When
compared to the preceding fiscal year FY 20-21, it increased by 8.73%. Transfers-in are budgeted to decrease by
66% mainly due to less federal funding from the American Rescue Plan Act 2021�
In this year’s budget, expenditures were increased by $5�2M or 4% over last year’s adjusted budget� This increase
in expenditures was adopted while taking into consideration the anticipated revenue increases and maintaining a
healthy fund balance� Refer to pages 17-32 of the Executive Summary for additional information�

During the budget process, several issues were raised:

Personnel-Related Issues
Employee Pay Raises

This year’s budget provides a 3% increase in Cost-of-Living Adjustment and an Updated Service Credit to city
employee’s future pension benefits. In 2021-2022, the City Commission approved a compensation study

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