This fall, the three biggest base layers of a Dripping Springs property tax bill all changed. The City of Dripping Springs lowered its rate. Hays County raised its rate a little. Dripping Springs ISD adopted a lower rate than the one it published in June. For a buyer comparing new-construction communities, the line that didn't change says the most. Headwaters Municipal Utility District has charged $0.90 per $100 of taxable value every year from 2020 through 2026.
A flat rate looks like stability. In this case it hides a steady shift in where the money goes, and a buyer can trace that shift in public district records before signing a contract.
Seven years at ninety cents
The Headwaters MUD tax history splits each year's rate into two parts. Maintenance and operations, or M&O, pays to run the district. Debt service pays back the bonds the district sold to build water, wastewater, drainage and road infrastructure.
| Tax year | M&O rate | Debt service rate | Total rate | Debt service revenue |
|---|---|---|---|---|
| 2020 | $0.4000 | $0.5000 | $0.9000 | $612,844 |
| 2021 | $0.3500 | $0.5500 | $0.9000 | $1,039,769 |
| 2022 | $0.2750 | $0.6250 | $0.9000 | $2,062,480 |
| 2023 | $0.2500 | $0.6500 | $0.9000 | $3,173,054 |
| 2024 | $0.1000 | $0.8000 | $0.9000 | $4,360,193 |
| 2025 | $0.0250 | $0.8750 | $0.9000 | $5,869,611 |
| 2026 | $0.0000 | $0.9000 | $0.9000 | not yet reported |
The 2026 tax order in the district's September 17, 2026 board packet levies the full $0.90 as debt service tax. Minutes from the board's August 20, 2026 meeting show a unanimous vote to propose that rate and set a final hearing for September 17.
Where the cushion went
For six years, Headwaters handled growing bond payments by moving rate from operations to debt. Each time debt service went up, M&O went down by the same amount, so homeowners saw the same $0.90. Debt service revenue rose almost tenfold from 2020 to 2025 while the headline rate never moved.
The 2026 order sets M&O at zero, so there is nothing left to shift. Within a $0.90 rate, future debt growth has to be covered by rising taxable value in the district. Headwaters still has bonds it can issue. The district's Series 2025 road bond official statement reported $12.135 million in road bonds and $15.61 million in water, wastewater and drainage bonds authorized but not yet issued after that sale.
None of this predicts the 2027 rate. It does show that the reason the rate stayed flat for so long no longer applies.
Location within the district matters too. The same official statement says part of Headwaters MUD is inside Dripping Springs city limits and the rest is in the city's extraterritorial jurisdiction, or ETJ. All of it is north of State Highway 290 and within Dripping Springs ISD. Two homes in the same district can have different bills depending on whether the city's rate applies.
Parten Ranch follows the same pattern at a dollar
Headwaters isn't the only district doing this. According to Community Impact's 2021 report on Parten Ranch, Springhollow MUD provides wastewater service there and Hays County MUD No. 5 handles water treatment. Because the community sits in the ETJ, residents don't pay city property tax.
Hays County's 2025 rate table lists Springhollow MUD at $1.00 per $100: $0.15 for M&O and $0.85 for debt service. Hays County MUD No. 5 is listed at $0.3968. In a May 13, 2026 notice to the city, Springhollow proposed its sixth utility bond issue to reimburse the developer for Parten Ranch Phase 8 facilities and wholesale water capacity fees. The notice said the total rate would stay at $1.00 while the debt service share rose from $0.85 to $0.875. When the item reached the City Council's July 21, 2026 agenda, the bond issue was capped at $4.385 million.
The total stays the same and the debt share grows. Springhollow's numbers suggest a little M&O room remains as of 2025, while Headwaters has none left in 2026.
Heritage bills by the lot
The Heritage community uses a different tool. A public improvement district, or PID, charges a set annual installment for each parcel instead of a rate per $100. The Heritage PID 2026 annual service plan update, dated August 18, 2026, updates the assessment rolls for Phases 1 through 3. For installments due January 31, 2027, the plan lists $3,446.83 for a type-2 lot and $3,746.56 for a type-3 lot in Improvement Area #1.
A city financing presentation by Hilltop Securities, tied to the 2025 bond issue for Improvement Areas #3A and #3B, converted the average installment to a tax-rate equivalent of $0.7586. On a modeled $420,000 home, that came to $3,185.96. It sat on top of a 2025 base stack of $1.8620, or $7,820.57 on the same home. That $0.7586 is an illustration for comparison, not a rate on anyone's bill. Heritage PID bonds of $7.043 million in 2023, $6.873 million in 2024 and $7.021 million in 2025 back those installments. The 2025 issue closed November 18, 2025.
For a buyer, the questions differ by tool. With a MUD, ask how the rate splits between operations and debt and how much bond authority is left. With a PID, ask for your lot type and its installment in the current service plan.
Stacking tax year 2026
Here are the base layers, with the year behind each figure:
- City of Dripping Springs: $0.219217 per $100 for FY 2026-27, down from $0.2267. That includes $0.1731 for M&O and $0.046117 for debt service, per the city's September 23 announcement.
- Hays County: $0.4097, up from $0.3999. In its coverage of the FY 2027 budget the Commissioners Court adopted on September 15, The Wimberley View reported that rate along with the county's estimate that the county expects the average homeowner's county bill to drop by about $8.41 a year because the tax base is growing. The $0.3999 figure includes the county's special roads tax.
- Dripping Springs ISD: $1.0985, adopted unanimously on September 28. That splits into $0.7485 for M&O and $0.35 for debt service, per the district's announcement. The rate published with the budget in June was $1.1052.
- Emergency services districts: The latest published figures are for 2025. Hays County ESD #6 was $0.080240 and North Hays County ESD #1 was $0.05. Which ESDs apply depends on the parcel.
Your tax equals the rate times your taxable value, divided by 100. For a $500,000 taxable value before exemptions and ESDs, here is how a Headwaters home inside city limits adds up for 2026:
- DSISD: $5,492.50
- Headwaters MUD: $4,500.00
- Hays County: $2,048.50
- City of Dripping Springs: $1,096.09
That totals $13,137.09, a combined rate of about $2.63 per $100. The MUD line is more than four times the city line. In the ETJ part of the district, the city line drops off.
Going into a closing in late 2026, the city, county and school rates moved in both directions this fall. The MUD line held steady, and the history behind it is the part to understand.
The paperwork at contract
Texas requires sellers to put this in writing. The Texas Real Estate Commission's notice page says Water Code §49.452 requires a seller of property in a district to give the buyer written notice, and it points to the district's own notice form when one exists. PIDs have their own section of state law, Texas Property Code §5.014, titled "Notice of Obligations Related to Public Improvement District."
A notice tells you a district exists. The split between operations and debt, and any remaining bond authority, are in the district's tax history and bond documents. This post is general information, not legal, tax or financial advice. Please confirm your own parcel's districts and obligations with Hays CAD, the district itself, and your attorney or tax professional.
Quick answers
Does a flat MUD rate mean my MUD tax stays the same? No. The rate and the bill are different things. Your bill is the rate times your taxable value, so a flat rate on a higher appraisal means a higher bill.
Does every Headwaters home pay city tax? No. The district covers land both inside Dripping Springs city limits and in the ETJ, and the city rate applies only within city limits.
Where do I find a Heritage lot's installment? The current Heritage PID annual service plan lists installments by improvement area and lot type. The next installments are due January 31, 2027.
If you're comparing Headwaters, Parten Ranch, Heritage or another community with its own district, I'm happy to pull the tax history and service plan for the homes on your list so you can see where each bill is headed before you write an offer. Kristen Balke is here for exactly that conversation. Let's Connect.
