TEMPLE, Texas (KXXV) — The City of Temple approved its 2026 budget, which includes a property tax increase of about $240 per year for the average homeowner. City leaders say the increase will fund infrastructure, safety, and water projects, while also offsetting revenue losses tied to state-mandated veteran tax exemptions. Some residents and business owners worry the higher costs could hurt affordability and change the city’s small-town character.
- Temple’s 2026 budget was approved with property tax hike
- Average homeowner to pay about $20 more per month / $240 per year
- Funds will support safety, infrastructure, and water needs
- The mayor says investments now prevent bigger costs later
- Temple’s veteran population up on average 27.5% — exemptions cost city $4M+
- Business owner fears affordability may decline, Temple could lose "small-town feel"
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Temple City Council approved a property tax increase Thursday during a special-called meeting to fund the city's 2026 budget, raising concerns among local business owners about housing affordability.
For example, the tax increase will cost homeowners with a $220,000 property an additional $20 per month, totaling nearly $240 extra per year.
"It's putting the average person in a tricky spot if they want to be a homeowner," said Sonya Burnett, owner of 1914 Coffee House and a Temple property owner.

City officials say the additional revenue will fund public safety initiatives, infrastructure improvements and water projects.
"I love the growth, the new people and the vibrancy, but I don't want to turn into a big city that people can't afford to live in," Burnett said.
“We understand that any increase in taxes is a concern for residents, and we do not take this decision lightly. Temple is one of the fastest-growing cities in the region, and this budget ensures we can keep pace with that growth while preserving the quality of life our community expects."
Mayor Tim Davis defended the increase in a statement, saying the investments are necessary for long-term fiscal responsibility.
"By making these investments now, we are protecting our residents from even greater costs down the road," Davis said.

The city faces additional financial pressures from state-mandated tax exemptions for disabled veterans, which resulted in more than $4 million in lost revenue, according to the city. Temple has seen a 25 to 30% increase in its veteran population, contributing to the revenue shortfall.
"The new property tax revenue, about $11.7 million more than last year, including $3.5 million from new homes and businesses, helps ensure that growth is shared across the community."
"When you say it like that, it doesn't sound like a lot, but over time, it is a lot," Burnett said about the monthly increase.
For prospective home buyers, the tax increase adds another layer of financial consideration in an already challenging housing market.
"You do have to factor in that increase in property taxes into what you can afford to buy, and that just makes it harder and harder," Burnett said.
According to the city:
- $53.4 million to the Temple Police Department and Temple Fire & Rescue.
- $20.5 million in Temple’s Parks and Recreation system and facilities.
- $76.2 million in Temple’s Water and Wastewater System, along with key infrastructure upgrades.
- $118.8 million in the Capital Improvement Program that shapes Temple’s future
Despite supporting the city's growth, Burnett hopes officials will use the additional revenue responsibly to maintain Temple's affordability compared to larger Texas cities.
“The FY 2026 Budget is an investment in both today and tomorrow. It allows us to continue providing dependable services while also preparing for the demands of growth. Every dollar is being directed toward projects and services that improve safety, expand opportunities, and support a thriving community for our residents.”
"It's not Austin or Dallas; people can afford to live here. If we keep doing this, I think it's going to change that," Burnett said.
You can estimate your annual City taxes with this simple formula:
Property tax amount = (0.6999 ) x ( taxable value of your property ) / 100
The budget officially goes into effect Oct. 1, 2025.
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