SAN ANTONIO – The City of San Antonio is getting ready to break out the budget machete and could consider property tax raises.
City staff are recommending both tactics as part of a plan to combat a growing budget deficit in the general fund, which could balloon to more than $250 million within five years.
“It’s not lost upon me that the city hasn’t increased the tax rate in 33 years,” City Manager Erik Walsh told council members during a Wednesday budget briefing.
The general fund is currently about $1.7 billion, and covers many core city operations like police, fire, libraries and parks. However, Wednesday’s presentation showed those costs are projected to consistently outpace revenues in the coming year.
One of the biggest sources of funding, property tax revenue, is expected to decline next year and then see minimal revenue growth for the next four years.
The city’s share of CPS Energy revenues is also expected to go down in FY 2027 before seeing moderate growth in subsequent years, and city sales tax revenues are expected to grow between 2% and 3.5% over the next five years.
Though the city’s FY 2027 budget is expected to be balanced, according to a Wednesday budget presentation, the deficits could begin in FY 2028 with a $130.7 million gap between projected revenues and expenses.
By the 2031 fiscal year, the general fund deficit could grow to $264 million.
Even raising property tax rates to bring in the maximum amount of revenue allowed by state law without an election would only close the projected deficit to $196 million by FY 2031, according to Wednesday’s presentation.
Council’s first task will be to tackle the first two years. City staff laid out two scenarios Wednesday: one with $130.7 million worth of cuts and a second with a mix $70 million worth of cuts and maxing out the tax rate for property tax revenue.
Where the cuts would fall isn’t clear yet, but Wednesday’s presentation listed “non-core, non-mandated services” and emphasized minimizing “impact to vulnerable populations.”
The presentation also mentions adjustments to fees and charges.
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