City of McAllen Explains Property Tax Rate Increase: Increase stems from 2018 McAllen voter approved bond election, totaling $25 million for drainage, traffic improvements

by Office of Communications | Aug 06, 2019

As the City of McAllen goes through its annual budget process with the McAllen City Commissioners, highlighting the various projects that make up the proposed revenue and expenses for the upcoming 2019-2020 fiscal years, one critical aspect included in the bottom line is the expected property tax increase McAllen property owners will face. This property tax rate increase is directly related to the 2018 bond election, in which McAllen voters approved $25 million in bonds for the City of McAllen for various drainage and traffic improvements projects.


During the time leading up to the bond election, the City of McAllen hosted various town hall meetings and other community outreach efforts, letting McAllen homeowners know that if voters approved both bonds, they could expect a tax rate increase of $1.88 per $100 valuation equaling to about $24 per year, per average home.  Those calculations were based on an average home price of $128,000.


This year, McAllen property owners will in fact pay a tax rate increase of $1.64  per $100 valuation, which is less than what was projected and coming out to $21.04 a month.  Favorable credit rating and interest rates allowed City officials to purchase bonds at a lower price than expected, leading to the lower tax rate increase for McAllen property owners than originally anticipated.


“City of McAllen officials and administration are extremely conservative when it comes to taking on debt that is passed on to our property owners,” said McAllen City Manager Roel “Roy” Rodriguez, P.E.  “The drainage and traffic improvement projects were very much needed and will bring relief to those concerns expressed in a 2015 citizens survey.  If the City of McAllen had tried to fund those projects ourselves, it would have taken decades to be able to pay for them.  The bond election allowed us to fast-track these projects and hopefully bring swift resolution to our citizens regarding flooding, drainage and traffic.”


Even with the slight tax increase, McAllen property owners pay one of the lowest ad valorum tax rates in the Rio Grande Valley and state of Texas, thanks to the amount of sales tax revenue collected by the City of McAllen.  McAllen property taxes generated account for 33% of the general fund budget, which 100% of that goes to pay for fire and police protection.  Sales tax revenue and other funding sources fund the remaining expenses, including quality of life projects, services, programs and infrastructure.

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