SAN ANTONIO – San Antonio is looking at a much smaller bond program or possibly raising taxes to pack more in rather than keeping projects on the back burner.
And no matter which way they go, the bond vote could also effectively put the Spurs arena project back onto the ballot, albeit in a roundabout way.
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The city’s five-year bond programs are typically crammed with major infrastructure projects like overhauling failed streets, drainage projects, park improvements, new greenway trails, and fire and police stations. Across the city, staff estimate there are 304 potential projects worth $5.8 billion.
“Our need will always outweigh our capacity,” City Manager Erik Walsh said during a Wednesday council briefing.
This time, the gap is especially noticeable.
The bond programs, which require voter approval, are backed by city property taxes. But because of sagging property values, the city estimates it only has the capacity for a $442 million bond program in 2027. That’s compared to the $1.2 billion program voters approved in 2022, which also included the city’s first housing bond.
Staff also recommended raising stormwater fees on residents’ San Antonio Water System bills to make room for another $175 million worth of drainage projects outside of the bond program. That would be in addition to the SAWS rate increase the council is also considering.
Staff say if property values recover sooner than expected, the city could put together another bond program before the five-year program is over.
Some councilmembers, miffed that needed projects may have to sit on the back burner even longer, want to pursue a larger bond program — perhaps $1 billion or more.
“People on our sides of town are demanding more things, their fair share, and they haven’t been getting that,” Edward Mungia (D4) said.
But under that approach, if property values don’t rise quickly enough to cover debt payments, which the city doesn’t expect they will, the property tax rate would have to go up instead.
And any increase would be on top of the 3.9% tax hike the City Council just approved as part of its regular operating budget and another increase planned for next year.
“If we go and we raise the amount of this bond by increasing taxes, we’re going to have something of a holy war on our hands over this bond package,” said Marc Whyte (D10), who was one of four votes against the budget tax increase.
Walsh promised staff would provide councilmembers with “worst case scenarios” to see how much residents could see their tax bills go up.
Project Marvel infrastructure
Part of that bond could include $35 million worth of infrastructure needs around the city’s planned downtown sports and entertainment district, known as Project Marvel. That amount assumes the Texas Department of Transportation provides about 80% of the funding for several projects.
That’s a dramatic drop from the $220 million to $250 million staff initially presented in June 2025, but city officials say they’ve dropped or scaled back some of the major projects.
For instance, there is no plan for a new parking garage within the new proposal and no complicated “single-point urban interchange” for Durango Boulevard and I-37. Work on Durango Boulevard would include improvements, but not a complete overhaul.
Part of the non-binding term sheet for the Spurs arena deal, though, says the city’s $489 million share is subject to voter approval passage of a bond program to support infrastructure improvements for the district.
If that fails, Walsh told KSAT, “We would have to reexamine where we’re at with the whole thing.”
At least one council member said they wanted to see those projects separated into their own proposition for voters to consider, and Mayor Gina Ortiz Jones asked about dipping into a pool of hotel-related state tax dollars the city’s using to fund the arena, known as the Project Finance Zone (PFZ), instead, to fund those downtown projects, and possibly others.
She also asked about using city-controlled tax capture districts known as Tax Increment Reinvestment Zones (TIRZ) to fund potential bond projects.
“I think as we’re, you know, all looking at how do we get as much done here, looking at all the various pots, we want to also explain to folks, ‘Hey, we have taken those things that can be paid for with other pots of money. We’ve done that to protect as much of the bond capacity as possible,’” she said.
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