Council passes budget, triggering tax rate election

After a long and often procedurally-confusing meeting that stretched into the better part of two days, Council passed a $6.3 billion budget for fiscal year 2026 based on a tax rate 5 cents above the state cap, triggering a tax rate election this November. Should Austinites approve that tax rate, the average homeowner’s property taxes would increase by about $300 annually next year. Either way, fee increases for city services like water and trash will increase by around $116.

Without that extra 5 cents, City Manager T.C. Broadnax’s original budget proposal in July would have responded to a $33 million deficit by cutting funding to services such as firefighter overtime, the city’s housing trust fund, several nonprofit public health and homeless services, the library bookstore Recycled Reads and more. 

After Council reached a consensus Thursday, those services were restored, and most of Council’s priorities were passed. The popular Homelessness Strategy Office’s comprehensive plan was fully funded, firefighter overtime was restored to meet national standards and new funding was added for EMS 911 call-takers, park maintenance, police oversight, financial assistance from the family stabilization grant, the Harvest Trauma Recovery Center, wildfire mitigation, sidewalk and street safety improvements and more.

Though public safety is still the largest item in the city budget, the Austin Police Department (APD) will cut $9 million from its overtime budget this year.

Despite reaching enough consensus to pass the budget, there were still questions about how sustainable the funding will be, when looking forward to three more years (at least) of a slash-and-burn Trump administration, further state constriction and the city’s continuing structural deficit. 

Throughout the budget process, Council Member Marc Duchen has been the lone “no” vote on nearly every item, and he reaffirmed Thursday before voting no on the budget that he feared it was a “band aid.” Duchen continued, “We will be forced to address some of these problems, including ones we voted on not less than five minutes ago, in the very near future.” He closed his comments by recommending a third-party audit of the city’s spending to “make sure that we’re being efficient with every dollar.” (Duchen’s one proposed amendment was an attempt to raise Austin Energy utility bills, which would have added $63 million in revenue, but failed.)

Several Council members warned that items labeled “one-time” expenses will beg repeat consideration each year, becoming stop-gap solutions.

“We’re going to be in the same place maybe every year by labeling what are clearly going to be ‘ongoing’ expenses, ‘one time’ expenses,” said Duchen.

Council Member Natasha Harper-Madison, who abstained on many last-minute amendments, raised the opposite concern: “I just really struggle with seeing critical items go under ‘ongoing’ when I watch these organizations gear up for ‘ongoing’ and have that rug snatched out from under them.”

The city manager, speaking for the first time during the budget sessions, said Thursday, “I don’t want to create a false perception for the social service providers that just because it’s in the budget in 2026, the expectation is that it might be here in 2028, or ’30. There’s some discussion about whether or not we as a city should be doing those things over and above our core services.” Broadnax didn’t expand on what he thought were core vs. non-core services.

Several Council members indicated the reason they were voting “yes” is that this budget maintains the city’s 17 percent reserves every year until 2028.

“We’d be in the green for at least three years from the start,” said Council Member Zo Qadri. “Our goal has been a balanced budget. This is as close as we can get to that, and this is how we protect our city from potential federal cuts while meeting the needs of our community. Yes, it’s a rainy day now. We recognize the severity of our situation – but there are other rainy days we need to be prepared for.” 

“We’ve recognized that there is an inherent tension between asking people to pay rates, fees and taxes for services and the issue of affordability,” said Mayor Kirk Watson upon the budget’s passage. “It is imperfect. It is a part of what it means to live in a big, diverse city where people have lots of different points of view. It’s not always going to meet our concept of perfection.”

Alter remarked that this budget cycle was a matter of choosing whether to follow in the federal and state government’s footsteps or invest in the community.

“We had a choice,” he said. “We could follow the state and federal example and walk away from Austinites and say, sorry, you’re on your own, or we could do what Austin does best, which is take care of each other. Today, we chose people.”

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