SAN ANTONIO – Slowing, or even shrinking, property tax projections are prompting Bexar County and the City of San Antonio to rethink their financial strategies. As they face potential shortfalls, both entities are considering measures that may include budget cuts, reductions in new spending, or even increasing the tax rate, a significant shift from their recent fiscal practices.
“This is not normal,” remarked Bexar County Manager David Smith during an April briefing, underscoring the unusual financial climate. With property taxes playing a crucial role in funding essential local services such as law enforcement, libraries, parks, and courts, any decline in revenue could have widespread implications.
For the City of San Antonio, property tax revenue constitutes about 28% of its general fund, while Bexar County relies even more heavily on property taxes, with approximately 80% of its general fund budget derived from this source. Although neither the city nor the county anticipates a deficit in the immediate future, both are bracing for potential budgetary challenges ahead.
Property Appraisals and Market Trends
The revenue generated from property taxes is directly influenced by property values, which are assessed by the local appraisal district. Rogelio Sandoval, chief appraiser at the Bexar Central Appraisal District, emphasized that the current year has shown a noticeable decline in the market compared to the previous years.
After peaking at around $345,200 in 2022, average home sale prices in Bexar County have decreased to approximately $338,800 by 2025. The total market value of single-family homes has dropped by over $203 million, even considering new constructions.
In a recent presentation to the city council, San Antonio Interim Budget Director Alfredo Martinez noted that the “worsening housing market” is a significant factor contributing to the anticipated decline in property tax revenue. Additional factors include a new $125,000 exemption for businesses on their income-producing personal property, alongside existing exemptions like the general homestead exemption for primary residences.
As property owners continue to contest their values, neither the city nor the county can yet determine the exact taxable value. The deadline for most property owners to file a protest is May 15, with the Bexar Central Appraisal District set to certify the appraisal roll to each taxing unit by late July.
City of San Antonio’s Financial Outlook
The City of San Antonio anticipates a 2.13% decrease in its taxable value after accounting for protests, appeals, and exemptions. If the city does not raise its tax rate, this decline will directly impact the revenue collected.
The city’s general fund also relies significantly on sales taxes and a portion of CPS Energy revenues, alongside other funding sources. A five-year forecast indicates the possibility of a $131 million deficit in the general fund by FY 2027, potentially escalating to $264 million by FY 2031 if the current property tax rate remains unchanged.
While the city could raise its tax rate, state law typically limits this increase to a maximum of 3.5% more tax revenue from existing properties without voter approval. Notably, the city has not raised its tax rate since FY 1993, opting instead to either cut or maintain it during that period.
Even if the city were to maximize its property tax rate, projections suggest that this would not suffice to eliminate the deficit. Consequently, a reduction of $70 million in spending over the next two years would still be necessary. In a May 6 presentation, city staff proposed an alternative scenario to fully address the $130.7 million deficit through spending cuts, although the specifics of where these reductions would occur remain unclear.
Bexar County’s Future Fiscal Challenges
According to Bexar County’s projections, a deficit in the general fund is not expected until FY 2029, at which point it could reach $145 million. Although County officials, such as County Manager David Smith, are not yet considering cuts or a tax increase, they acknowledge the need to exercise caution regarding new spending.
“This year it’s starting to level out,” stated County Manager Smith, reflecting concerns about slowing revenue growth. Historically, the county has enjoyed substantial revenue increases, but current trends suggest a need for a more measured approach moving forward.
Both Bexar County and the City of San Antonio operate on a fiscal year that runs from October 1 through September 30, and as they navigate these financial challenges, the impact on local services and programs remains a significant concern for residents.
