Lubbock leaders not so easily tempted to raise tax rate despite looming challenges in upcoming budget

Texas cities have been warned not to take advantage of recent property tax relief. The Texas Legislature just funded $41 billion in property tax relief (over two years) and if voters approve in November, then there’s another $10 billion on the way.

Lubbock is under pressure to not raise property taxes, according to Tim Collins, city councilman for District 6.

“I think the Legislature is going to be somewhat offended,” Collins said of the idea of increasing property tax revenue. “I don’t think that’s gonna work out well for us in the short or the long term.”

But at the same time, Lubbock’s sales tax revenue has been disappointing this year – although somewhat recovering. How disappointing? The city imposed a hiring freeze in April which we covered here.

And big expenses are on the way when budget negotiations get underway this summer.

“Meet and confer” – a form of salary and benefit negotiation between the city and first responders – is likely to be expensive, Collins said. Deferred maintenance, including street repair, is also high on his list.

Budget pressure at glance:

• Cities are under pressure from the governor and other state officials to not erode recent property tax relief.
• Lubbock’s sales tax revenue has been soft in early 2025 – projected to fall nearly $5 million short of previous estimates.
• “Meet and confer” is likely to bring higher costs for salaries and benefits at the police and fire departments.
• Street maintenance is already behind according to Collins. Other maintenance is needed too.

Sales tax caused trouble this year

In February an article in the Texas Tribune blamed high housing prices, rising property tax premiums and the overall cost of living for lackluster growth in sales taxes statewide.

Lubbock got used to sales tax income going up more than 5 percent a year over the last five years. That hasn’t happened in early 2025 with four months left in the city’s fiscal year.

For the year, Lubbock’s increase is currently 2.65 percent – a little more than half the increase Lubbock hoped for. For the Texas Comptroller’s report in May, the sales tax income was up 6.28 percent compared to May of last year. So, it’s recovering as budget season starts, but the city is still behind.

“We projected to collect about $105 million for this fiscal year,” said Joe Jimenez, Lubbock’s chief financial officer.

That projection had to drop nearly $5 million at the time of the hiring freeze in April.

“We probably won’t dig into reserves. We have a lot of cash-funded capital projects,” Jimenez said.

Putting projects on hold would delay the expenses, he said.

“We’re hoping they bounce back our way, but again, we just want to be proactive just in case they don’t come our way,” Jimenez said.

‘Meet and confer’

The city does not yet have a budget number for “meet and confer” according to Jimenez.

In short, here’s how “meet and confer” works. City management negotiates with the police officers and firefighters through their professional associations. A proposed deal (usually a multi-year agreement) goes to the City Council for consideration. If approved, the council must spend the money in the deal.

“We’re still meeting internally with the Fire and Police Departments. We’ve had a couple of good meetings with them. We’ve gone back and forth on that, but we’re still kind of working on the compensation,” Jimenez said.

For perspective, $178 million of the current budget is for public safety out of the city’s $311 general fund portion of the overall budget. The total budget is $949 million – nearly $640 million of that is for things the Council cannot arbitrarily control. That includes the airport, Lubbock Power & Light, water/sewer and some debt repayment funds.

David Glasheen, the councilman for District 3, said, “I think ‘meet and confer’ is actually going to give us some predictability for the budget process both this year and going forward.”

Inflation is not as bad for local taxpayers as last year. But that’s not an excuse to raise taxes, he said.

“The economy is certainly improving under President Trump, and people are a lot more optimistic. … But we always need to limit government spending as much as possible to what is absolutely necessary to fulfill the core functions of public safety and infrastructure,” Glasheen said.

“I’ll still support nothing higher than a no-new-revenue rate because that gives us more than enough growth in the budget,” Glasheen added.

Collins said, “I don’t see this one being any easier. Maybe they’ve never been easy. … Let’s be just as focused this year as we were last on trying to achieve the lowest tax.”

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