City Council kicked off its budget process Tuesday with a closer look at the city manager’s proposed $6.3 billion budget and the prospect of a tax rate election in November.
Mayor Kirk Watson has already stated that the maximum tax rate the Council sets on July 31 is likely to trigger an election due to the state’s 3.5 percent cap on property tax revenue. Lower than expected sales tax revenue, anticipated federal funding cuts and the end of pandemic relief funds don’t help the city’s financial situation.
Still, even with Austin’s $33 million deficit, City Manager T.C. Broadnax has presented Council with a balanced budget, made possible by transferring $14.1 million from the city’s reserve funds and shifting funds in other departments.
Broadnax, speaking at a press conference following Tuesday’s work session, said the draft budget “was shaped and influenced by Austin residents who provided input … [which] was particularly critical this year given the significant financial challenges that we are facing.”
While Mayor Pro Tem Vanessa Fuentes noted her appreciation of a balanced budget, she expressed concern about what that would mean for funding needs in future years. She said she would like to do a deeper dive into what budgetary shifts were made to deliver a balanced spending plan.
“I believe we have before us a Band-Aid budget, a budget that has Band-Aid solutions,” she said. I just want to make sure we take time to unmask all of the changes that have been made as part of this proposal.” Council Members Ryan Alter and Mike Siegel echoed similar sentiments in their remarks.
In her presentation to Council, Kerri Lang, director of budget and organizational excellence, provided finer points of the draft budget, noting that the $1.5 billion general fund represents a 3.7 percent increase over the fiscal 2024-2025 budget.
If approved, the city’s civilian employees will see a 4 percent wage increase, and the living wage will increase to $22.05 per hour, up from $21.63 per hour.
Some of the proposed spending plan’s highlights include:
- $8 million for emergency shelter operations at the Marshalling Yard (provided through the Housing Trust Fund)
- $925,000 for 12 new positions to expand outreach services for the city’s unhoused population and to improve encampment management
- Adding $400,000 to emergency rental assistance, bringing the fund to $4 million
- Establishing a Human Rights Division in the Office of Equity and Inclusion; $345,000 for emergency response and cold weather shelter operations
- Adding $3.7 million to Austin Energy to go toward customer rebates, incentives and the solar program.
- $2.9 billion for watershed infrastructure improvements, the Convention Center, and the expansion of the Austin-Bergstrom International Airport.
According to a press release issued last week, the proposed property tax rate is $0.5276 cents per $100 of assessed property valuation, which means the typical Austin homeowner will still see an increase of $12.90 per month, or $154.83 per year, in the city’s portion of their annual property tax bill.
Rates and fees for electricity, trash collection service, water, drainage and the transportation user fee, are proposed to increase, meaning the average tax-and ratepayer increase would be $22.35 per month.
The Austin Monitor’s work is made possible by donations from the community. Though our reporting covers donors from time to time, we are careful to keep business and editorial efforts separate while maintaining transparency. A complete list of donors is available here, and our code of ethics is explained here.