Government
BY BEN THOMPSON
Austin’s trimmed budget, lower tax rate approved Austin officials passed a reduced $6.3 billion budget and tax rate for fiscal year 2025-26, weeks after voters rejected a tax hike under Proposition Q. The specifics The proposition’s failure automatically dropped the city tax rate, removing about $100 million from Austin’s general fund. City finance staff recommended cutting most extra Proposition Q spending, which had centered largely on homelessness response, public safety and parks upkeep. Further adjustments in the November budget review shifted some funding toward medic overtime and mental health response, homeless shelter and services, and employee benefits. The big picture Austin’s FY 2025-26 tax rate is $0.524017 per $100 property valuation, a 5-cent decrease from the
4-year firefighter contract approved City and Austin Firefighters Association leaders agreed to a new labor contract on Dec. 18, capping off months of negotiations. What happened A new working schedule with reduced weekly hours will be implemented as staffing increases under the new contract, expected to cost about $63 million over four years. Officials said the deal will improve hiring, promotions, pay and firefighter wellness. The agreement also maintains fire depart- ment operations unless the city ever reaches a “severe financial crisis.” If such budget issues arise, a new collaborative framework was created for both sides to agree on next steps and possible impacts to fire engines or stations.
Taxpayer impact City property taxes and other charges will rise about 4% in the coming year, and are expected to rise more than 6% next year.
Utility charges Property taxes City fees
Fiscal year 2024-25
$2,557.92
$1,969.56
$920.04
$2,603.76 $2,074.28 Fiscal year 2025-26 (revised)
$988.8
Fiscal year 2026-27 (planned)
$2,732.4
$2,242.8
$1,042.92
NOTE: ESTIMATES BASED ON AUSTIN'S MEDIAN HOMESTEAD VALUE, TYPICAL CUSTOMER UTILITY AND SERVICE USAGE, AND TYPICAL SINGLE-FAMILY HOME CHARACTERISTICS AS DEFINED BY THE CITY.
SOURCE: CITY OF AUSTIN/COMMUNITY IMPACT
Proposition Q rate but still about 10% higher than last year’s. The owner of a home valued at about $495,000, the city median, can now expect to pay about $100 more in taxes and city or utility charges.
City reports on 1st year of ‘HOME’ building policy Hundreds of new units were cleared for construc- tion during the initial year of the Home Ownership for Middle-income Empowerment, or HOME, initiative’s first phase. The overview The policy allowing more housing on single-fam- ily lots was approved in late 2023 and became effective in February 2024. Over the following year, applications for 436 housing units in duplexes and two- or three-unit projects were approved along with 148 single-family infill projects. Based on limited results so far, city staff reported HOME is potentially playing out as officials had hoped—encouraging smaller housing units at lower price points—although they said more time is needed before drawing firm conclusions.
HOME review Austin’s one-year HOME report found:
Declining residential demolitions Slightly lower sales prices for homes on smaller lots A slightly higher share of applications in areas at risk of displacement Minimal impacts on traffic, trash service, drainage and tree canopies
SOURCE: CITY OF AUSTIN/COMMUNITY IMPACT
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