Austin unveils $6.6 billion proposed budget; council sets July 30 public hearing

Mayor Kirk Watson called the July 16 work session to order and the city manager presented the proposed FY2026–27 budget, a multi-year plan with $6.6 billion in operating funds and a $1.5 billion general fund. City Manager T.C. Broadnax said staff aimed to ‘‘be thoughtful, focused, and strategic’’ while adjusting to the state's 3.5% cap on property tax revenue growth.

The Office of Budget and Organizational Excellence, led in the presentation by Carrie Lane and Deputy Director Eric Nelson, said the proposal balances the budget in part by identifying approximately $13.3 million in general fund reductions while directing new investments into workforce pay and key priorities. Major high-level figures in the presentation included a $6.6 billion all-funds operating budget (a 4.8% increase), a $1.5 billion general fund (a $53.1 million increase), and projections that the typical homeowner would see about a $174 increase at the proposed property tax rate of 57.953¢ (the presentation noted that the final homeowner impact depends on the adopted voter-approval rate and other adjustments).

Key personnel and program changes highlighted by staff include a 3% general civilian wage increase, an increase in the city's living wage to $22.15 per hour, and targeted increases for public-safety pension payments and sworn pay. The presentation stated that public safety (police, fire and EMS) represents about 64.7% of general fund spending. The budget also funds the local housing voucher program with a $7.8 million package drawn from a mix of general fund, housing trust fund and capital transfers and moves several grant-funded social service functions into operating funds for public health and homeless strategies.

Staff flagged reductions to the city's social service grant portfolio totaling roughly $5.1 million after a rubric-driven review; the presentation framed some of the changes as realignments and transfers into city-run operating programs (for example, bridge shelter and domestic-violence shelter funding moving into public health and homeless strategies). Director Lane told councilmembers staff used a rubric directed by council to determine focus-area reductions and planned to provide detailed contract-level impacts in follow-up budget sessions.

The presentation also warned of increasing debt-service obligations tied to previously voter-approved bonds and showed a forecast that debt service will grow notably through the late 2020s; staff said the peak of property-tax-supported debt service is projected around 2030 under current authorizations. The budget includes reserve planning and assumes some one-time FEMA reimbursements that affect the year-end reserve projection.

Deputy Director Eric Nelson summarized revenue assumptions: modest sales-tax growth (2.5% in FY27), an expected small decline in total taxable value and a proposed FY27 property tax rate projection (57.953¢) tied to the voter-approval tax-rate framework. Staff said next steps include topical work sessions July 22, July 28 and July 30, and a final adoption schedule in August.

Mayor Watson closed the presentation portion by suggesting a short recess and then presided over a lengthy council question-and-answer period in which members pressed staff on the details of position eliminations, the housing voucher funding mix, consultant contracts, market-study implementation and the cost drivers behind public-safety spending.

The council later approved a motion to set a public hearing on the proposed budget for July 30 at 3:00 p.m. in the council chambers; the motion was made by Councilmember Ellis, seconded by Councilmember Siegel, and adopted with Councilmembers Fuentes and Harper Madison absent.

What comes next: staff will return with detailed, line-item and contract-level information at upcoming work sessions (notably July 22 on social services, homelessness and community health) and post public-registration windows for the July 30 hearing on the city clerk's message board.