City Manager’s office outlines proposed FY2027 budget, details $6M HSO boost and 3.5% tax-rate baseline

City budget staff presented the proposed fiscal year 2027 budget and answered reporters’ questions about funding choices, tax assumptions and potential savings.

"Today's presentation laid out a balanced budget," the City Manager said, and introduced budget director Carrie Lane, Deputy Director Eric Nelson and Chief Financial Officer Ed Vanino on the dais.

Carrie Lane, the city's budget director, said the proposal includes a $6,000,000 increase tied to HSO, funded "as a mix of a few things that are new revenue": "It is $2,000,000 of new ongoing funding in the general fund, and then there's $4,000,000 in the housing trust fund, which is funded through, downtown density bonus funding," she said. Lane said staff will walk the council through the rubric and scenarios next week so members can decide final cuts.

Reporters pressed staff on why the budget baseline assumes a 3.5% revenue increase. Lane said a "no new revenue" approach would require about $26,000,000 more in reductions to balance the general fund and warned that "if we do not go to the full 3.5 percent in each year, we forever lose that revenue," making it harder to meet ongoing and future obligations.

On anticipated savings from a shared-services initiative known in the briefing as 1ATS, Lane said the city has been working on the effort for more than a year and expects savings across the forecast period, but cautioned that out‑year projections are more hypothetical until the first two years yield concrete results.

Reporters also asked about the interplay between reducing some social service contracts and funding other priorities. Lane said the city used a transfer from reserves this year to maintain social service contracts and emphasized that reductions this cycle were made across multiple departments — including public safety, police and fire — rather than singling out one area.

Regarding the police budget, Lane said approximately $24,000,000 of higher costs are largely automatic: about $11,000,000 reflects a contractual 5% wage increase for officers, and about $10,000,000 stems from internal service cost allocations. "The only brand new investment that the police received was one civilian position for recruiting," she said.

Lane said staff will return with the rubric, a series of reduction scenarios (including across-the-board and more strategic options) and the data needed for council to make final decisions.

The session concluded with staff offering to answer additional media inquiries via media@austintexas.gov and posting materials at austintexas.gov.