Austin City Manager T.C. Broadnax has put forth his budget proposal for the fiscal year 2025-26, amid a projected $33 million shortfall in the General Fund.
The General Fund is critical for funding essential city services, including police, fire departments, public health, parks, and various emergency services.
This shortfall stems from a 3.5% cap on property tax rates imposed by the state, alongside lower-than-expected sales tax revenue and cuts in federal funding.
The proposed budget amounts to $6.3 billion and allocates $544 million to the Austin Police Department, while the Homeless Strategy Office is set to receive $51 million.
Other areas of investment include equitable housing initiatives, cultural and heritage districts, the new Austin Convention Center, and support for the Austin Animal Center.
Broadnax emphasized that the budget includes necessary reductions to generate savings without compromising vital services.
He stated, “Doing so enabled us to increase funding in key areas such as wildfire response equipment, shelter for people experiencing homelessness, emergency rental assistance, energy rebates and incentives, youth athletic field maintenance, storm drain rehabilitation, and more.”
A closer look at the budget reveals that the proposed allocation for the Austin Police Department, at $544,071,279, is an increase of $26 million.
This funding represents approximately 36.7% of the $1.5 billion General Fund.
Additionally, the Austin Fire Department budget comprises about 17.8% of the General Fund, while Emergency Medical Services account for approximately 10%.
In comparison, the Homeless Strategy Office’s budget of $51,495,996 is roughly 0.3% of the General Fund, while the Housing Department, which focuses on affordable housing resources, is allocated $56,212,339, making up 0.8% of the General Fund.
Austin Mayor Kirk Watson highlighted several notable features of the proposed budget in a recent memo.
These include $1 million designated for Street Outreach Coordinators within the Homeless Strategy Office and $11.5 million to support shelters like the 8th Street Shelter and the Marshalling Yard shelter.
The Parks and Recreation Department will receive $375,000 for maintaining athletic fields at recreation centers.
Furthermore, the budget allocates $4 million for emergency rental assistance and $2.5 million for the Austin Infrastructure Academy.
The city is also planning to meet contractual public safety requirements and pension obligations, which include funding for the newly legislated pension needs of retired firefighters.
Another significant aspect of the proposed budget is a 4% wage increase for all city employees, aimed at addressing the rising cost of living in Austin.
This wage increase contributes to the overall budget increase for the Austin Police Department, which employs over 600 staff members.
For taxpayers, the proposed property tax rate stands at 52.76 cents per $100 of taxable value.
As a result, the average Austin homeowner can expect an increase of $154.83 in the city’s portion of their annual property tax bill.
In addition to property taxes, the city’s rates and fees for services such as electricity, water, trash, drainage, and transportation user fees are also projected to rise.
The increase for the typical Austin tax-and-ratepayer is expected to be around $113.40 annually.
City officials have indicated that tax rate elections might be necessary because any increase beyond the maximum 3.5% tax rate requires voter approval.
Next steps involve the Austin City Council discussing the proposed budget on Tuesday.
Following this, an Audit and Finance Committee special meeting is planned for July 22 to review budget scenarios for a possible tax rate election.
Public comment sessions will be held on various dates in July to gather input on different aspects of the budget.
The city council will also have the opportunity to review and propose amendments to the budget prior to final adoption, which is scheduled for August 13 through August 15.
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