Cleveland property owners will see a higher city tax rate this year, but city officials say there is more behind the increase than simply a decision to raise taxes.
Cleveland City Council approved its 2026-27 budget of $12.096 million on Sept. 15 and moved forward with a property tax rate of 75 cents per $100 valuation. That is up from 63 cents last year, though it remains below the city’s 77-cent rate from tax year 2024.
For the owner of a median-valued home, the difference is expected to amount to about $217 more in city property taxes this year.
According to a taxpayer impact statement provided by the city, Cleveland’s median homestead value for tax year 2026 is $197,145. At the 75-cent rate, the estimated city tax bill would be $1,478.59. The city’s comparison puts that at $216.80, or 17.18 percent, more than the previous fiscal year’s estimated bill of $1,261.79.
City officials say last year’s 63-cent rate was unusually low because of a one-time adjustment involving the city’s debt-service fund.
More than $350,000 in excess collections had been certified in the city’s Interest and Sinking Fund, which is used to pay debt. Under the state’s tax-rate calculations, that money reduced the amount the city needed to collect for debt service and helped bring the rate down to 63 cents.
With that one-time adjustment no longer available, city officials had expected the rate to move back closer to previous levels.
Another issue this year was a drop in the city’s tax base. According to a statement released by the city after the meeting, changes involving business personal property exemptions reduced Cleveland’s taxable value by more than $30 million. That means the city has a smaller amount of taxable property from which to raise money while still paying for city services and existing debt.
The city’s no-new-revenue rate was calculated at $0.652410 per $100 valuation, while its voter-approval rate was $0.806184. Council settled on 75 cents.
During the Sept. 15 meeting, council members asked staff how they had closed a roughly $320,000 gap that remained after an earlier budget discussion.
Staff said department heads went back through their budgets and trimmed discretionary expenses, including operating supplies. Staffing costs were adjusted, and the city was also able to lower its projected employee benefit expenses after employees made their actual benefit selections.
The city found savings in another place at the meeting when council canceled its contract with Houston Grotech for mowing services. Public Works employees will instead handle those areas.
City Manager Lee Tipton told council that ending the contract would help ease some of the budget pressure and said he had been assured the mowing would not be neglected.
By the time the budget came back before council, the numbers worked.
“The budget that’s presented is balanced,” staff told council.
Council approved the budget 4-1. Councilwoman Rachel Hall voted against it. Mayor Danny Lee and Councilwoman Desiree David were absent from the vote.
The unusual part of the evening came after the budget was approved and when council turned its attention to the tax rate.
The proposed 75-cent rate is made up of 48.311 cents for maintenance and operations and 26.689 cents for debt service. Both portions passed on 4-1 votes.
When council voted on the ordinance setting the total tax rate, the result was again 4-1, with Hall opposed, but four votes were not enough.
City Attorney Tommy Ramsey explained that the tax rate required approval from 60 percent of the council. With Lee and David absent, the four yes votes fell short of that requirement.
Rather than starting the process over, council recessed the meeting until 6 p.m. the following day, Sept. 16, when the tax rate ordinance could be considered again.
No one from the public spoke during the public hearing on the proposed tax rate earlier in the meeting.