SAN ANTONIO – The City of San Antonio is bracing for a challenging budget year that could have significant implications for homeowners. With a looming budget deficit of $158 million, the city is exploring various strategies to address this financial shortfall over the next two years.
Although the City Council will not vote on the budget until next month, city officials are set to unveil a draft proposal this Thursday. Discussions are expected to revolve around budget cuts, potential tax increases, and the possible introduction of several ballot measures.
As the city navigates these financial waters, here are some key points to consider.
Budget Cuts
To tackle the $158 million deficit, San Antonio must implement budget cuts. Although the deficit is not expected to impact the budget until FY 2028, adjustments will begin with the upcoming FY 2027 budget. City Manager Erik Walsh emphasized the necessity of reducing expenses, stating, “We’re going to have to reduce our expenses, and it will have impacts.”
During a budget discussion on June 18, city staff presented two potential pathways for addressing the deficit. The first, a more aggressive approach, would involve cutting nearly $138 million over two years and reducing over 200 positions, many of which are currently filled. This option would likely lead to significant reorganizations and program reductions.
In contrast, the staff’s preferred option proposed a more measured approach, with only about $11.7 million in cuts planned for both FY 2027 and FY 2028, totaling $23.4 million. However, this option heavily relies on a politically sensitive measure: raising the property tax.
Tax Increase?
San Antonio last raised its property tax in FY 1993. Current proposals suggest an increase from the existing rate of 54.159 cents per $100 of property valuation. Under state law, the city can only increase its tax rate by 3.5% without voter approval but can utilize unused increments from previous years.
If the property tax rate were to be maximized, it would result in an additional $81 in city taxes for the average homestead. However, approximately 46% of homesteads with a senior or disabled tax freeze would not be affected by this increase. Some council members, like Marc Whyte (D10), have expressed strong opposition to any tax hike, labeling it a temporary fix that fails to address the underlying issues.
Mayor’s Ideas
In light of the financial challenges, Mayor Gina Ortiz Jones has proposed several innovative solutions to help bridge the budget gap. In a letter addressed to business and philanthropic leaders, she sought their support in funding 15 external agencies over the next three years, including initiatives such as the San Antonio Botanical Garden and the MLK Commission.
Additionally, she advocates for a public vote on whether to redirect voter-approved funding for the Ready to Work job training program to support “qualified programs,” potentially freeing up general fund resources for essential services. A discussion on this topic was requested for the November ballot, pending scheduling.
Critics, such as Father Jimmy Drennan from the COPS/Metro Alliance, argue that the city government has the capacity to close the budget gap without reallocating funds from essential programs.
Spurs Arena
While separate from the immediate budget discussions, Mayor Jones has also highlighted the need for a potential vote on funding a new arena for the San Antonio Spurs. The Bexar County voters have already approved a $311 million contribution, but Jones suggests that the city should also hold a vote on its proposed $489 million share.
Although the funding for the city would come from bonds, which are subject to various restrictions, Jones believes the current financial climate influences public perception regarding significant investments.
As of now, it seems that the necessary votes for this issue to be placed on the November ballot may not be secured, but discussions continue.
In the meantime, Mayor Jones has been conducting a series of “listening sessions” to engage the community, with the final session scheduled for Wednesday at Blanco BBQ.
Pre-K 4 SA
The City Council is also set to deliberate on the potential early reauthorization of a ⅛ cent sales tax that funds the Pre-K 4 SA program, which was initially approved by voters in 2012. Although the
