SAN ANTONIO – San Antonio will consider its first property tax increase in 34 years as part of a plan to close a $158 million budget deficit over the next two years.
The 3.9% proposed increase to the tax rate is lower than the city had previously discussed, but a vocal minority of council has shown it’s already dead set against the idea.
Tens of millions of dollars and more than 100 city jobs were also on the chopping block in the city’s $4.4 billion FY 2027 budget proposal and two-year plan, which they presented to City Council on Thursday morning.
San Antonio is also looking to raise millions more in various new or increased fees, permits and other revenue sources — from charging short-term rentals more expensive permits to recovering a share of city expenses at major Fiesta events.
The city has been projecting a $158 million deficit in FY 2028 as projected expenses outpace revenue. The city balances its budget over two years, though, so the course-correcting starts now.
The deficit is within the city’s $1.76 billion general fund, the largest part of its budget, which covers services such as police, fire, parks, the San Antonio Metropolitan Health District, Animal Care Services and regular street maintenance.
Between the assorted tax hike, new revenues, budget cuts and updated projections, city staff actually expect to end FY 2028 with an extra $49 million to be used for FY 2029.
Tax hike
Property taxes are one of the main contributing factors to the city’s projected deficit.
Unlike previous years when soaring property values and new construction helped fuel budget growth, the city’s taxable base will actually shrink this year.
Raising the city’s current tax rate by 2.129 cents per $100 of valuation would raise close to $29 million in FY 2027, staff said.
That would mean the average homestead, with a taxable value of $231,356, would pay $49 more than if the rate stayed the same.
However, because the average homestead value has also declined from $233,909 in 2025, city staff said the actual difference in their tax bill compared to last year would be closer to $35.
Additionally, senior and disabled homeowners with a tax freeze — roughly 47% of all homesteads in the city — would be unaffected.
The city last raised its property tax rate in 1992, and has either cut or kept it flat every year since. The proposed increase to 56.288 cents would be the highest the rate has been since 2014.
The city’s plans to balance the budget also rely on an additional, 4.4% tax increase in FY 2028.
“We went through 9/11. We went through the financial crash in the early 2000s. We went through COVID. Yet somehow we didn’t raise taxes on the citizens,” Councilman Marc Whyte (D10) said. “Yet somehow today we think that this is something that should be considered.”
Whyte, Councilwoman Marina Alderete Gavito (D7) and Councilwoman Misty Spears (D9) all voted against a procedural item in an attempt to take the tax increase off the table.
Though their effort failed, an increase isn’t a done deal yet.
City Manager Erik Walsh confirmed staff would prepare alternate scenarios, without a tax rate increase, for council to consider.
On the other side, though, some would like to see what would be possible if the city were to take the tax rate further.
“I would definitely appreciate the different scenarios, not only without a property tax increase in any form, but also any other kinds of scenarios we could look at, even with the larger increase — just to see where that money could go towards improvements in services,” Councilman Ric Galvan (D6) said.
Cuts
City staff plans nearly $90 million worth of cuts to the general fund over the next two years, though a portion of it will just be shifting it to different areas of the budget.
Walsh said the cuts include cutting 101 city positions in FY 2027, more than half of which are currently filled.
However, Walsh said the city would work with those employees to find other vacant positions within the city for them to go into.
Walsh also said he didn’t think “there’s any major reductions to services that people will feel.”
However, avoiding a tax rate increase this year would require finding roughly $29 million in cuts, Walsh said.
If the city were to try and avoid raising the tax rate in FY 2028 as well, it would take about $65 million worth of cuts, which he believes would be “significant.”
Other revenue
The proposed budget lists more than 100 new or increased fees, permits, rental costs or other revenue sources in the general fund alone over the next two years, which the city expects it will bring in more than $30 million in that time frame.
Some, like increasing the EMS transport fee from $1,500 to $1,700, are expected to bring in millions of extra dollars. Others, like a $5 increase to the price of a city-provided dangerous dog collar, are only expected to bring in a few hundred dollars.
Mayor’s proposals
Mayor Gina Ortiz Jones has also thrown out ideas of her own, including diverting dollars dedicated to the voter-approved Ready to Work program and sending a letter to business and philanthropic leaders to chip in to help pay for certain items.
Walsh told reporters diverting money from the Ready to Work program had not been included in the proposed budget.
At least one of the programs Jones had solicited business leaders to fund, a hiring program for military spouses, was set to be cut, as was the scholarship portion of an education partnership program.
Jones had also previously highlighted the San Antonio Botanical Garden as an example of a group that could have its entire $1.2 million in annual funding trimmed. However, the proposed budget had only the $200,000 pruning, as city staff had originally planned.
The mayor pointed to the group again Thursday, as she talked about the choices among the proposed cuts.
“If we are looking at, again, reducing the tuition reimbursement — eliminating the tuition reimbursement program for our citizens, why would we still be giving the San Antonio Botanical Garden $1 million?” she said.
- 101 positions eliminated — More than half of the positions are currently filled, but the city plans to try and move them into other vacant positions.
- Citywide hiring freeze — For non-essential support positions in FY 2027 and FY 2028.
- 49 new SAPD officers — The officers are split between filling 22 vacant Park Police positions with new SAPD officers and 27 new positions for the new airport terminal.
- No additional patrol officers — There are no extra positions included toward the city’s multi-year goal of adding 360 cops to the street.
- New veterinary hospital — Animal Care Services expects to open a new facility at its campus in 2027. The project includes the renovation of the existing clinic.
- Non-San Antonio resident library card fee — $20 fee for library card holders who don’t live in San Antonio.
- Street maintenance — $129.8 million for the street maintenance program, up $7.4 million this year.
- 3% raise for civilian employees — Effective Oct. 1.
- 4% raise for SAPD —Effective Oct. 1 under a tentative union contract.
- 5% raise for SAFD — Effective Oct. 1 under a union contract.
- Short-term rental permits — Fees increasing from $300 to $450 for Type 1 permits and from $450 to $1,000 for Type 2 permits.
- Fiesta event recovery — City is aiming to recover 50% of police expenses from major Fiesta events.
Community Input Sessions
The city has at least 11 budget town halls scheduled between Monday, Aug. 17 and Tuesday, Aug. 25. More details can be found here.
More City Hall coverage on KSAT:
