$6.3 billion. That's how much Austin's new fiscal year 2025-2026 budget was approved for — another $400 million increase from last year (which was a $400 million increase to the year before that).

Come November, Austin City Council will ask voters to approve or deny a property tax rate of 57.4 cents per $100 of taxable value (aka 5 cents more than allowed without voter approval) in a tax rate election. The increase would average out to an additional $25.22 monthly charge, or $302.64 annually, to property owners.

We'll be taking a deeper dive into the budget for the next few days. Here's a peek into the plan.

Inside the deficit

So, why is raising property taxes on the table? The City of Austin is seeking ways to make up a $33 million deficit in the budget's General Fund, due to "lower than projected sales tax revenue, and cuts in federal funding," according to a memo from City Manager T.C. Broadnax. The deficit is also expected to grow over time — the City projects a deficit of $79.9 million for fiscal year 2030.

Fiscal year 2025 is expected to end with $5.7 million (.4%) below the budgeted revenue in the General Fund. This year's shortfall can largely be attributed to "persistent weakness" in taxable sales and declining sales of alcoholic beverages in bars + restaurants.

How is it structured?

The budget follows six strategic priorities:

Community Health and Sustainability
Economic and Workforce Development
High-performing Government
Homelessness and Housing
Mobility and Critical Infrastructure
Public Safety

What makes up the budget?

Just keeping the water running and lights on in Austin costs billions annually. | Graphic via City of Austin

The allocation of funding in this budget looks nearly identical to last year's $5.9 billion budget — a healthy majority (66%) goes toward funding city essentials. Austin Energy and Austin Water alone account for 43% of the budget, while the General Fund — which includes vital departments like police, EMS, Fire, Parks and Recreation, and Austin Public Library — takes up 23%.

The most significant percentage difference compared to last year: The Austin Convention Center redevelopment project gets 3% of the budget instead of 6%.

Where does the money come from?

City-wide revenue is expected to grow by 7% in the upcoming fiscal year. | Graphic via City of Austin

If you're a taxpaying Austinite, most of the funding comes from the money you pay in Austin Energy charges (30%), property taxes (19%), charges for services (15%), Austin Water charges (13%), and the remaining 23% comes from other taxes + fees.

Approval of the tax rate increase would generate $110 million during the year, which would support city services.

Notable investments

The new Austin Convention Center will feature sweeping art installations, like this example of a colorful canopy walkway. | Rendering provided by the Austin Convention Center Department and LMN/Page

A combined $2.9 billion will go toward ongoing infrastructure projects, including the new Austin Convention Center, expansion of the Austin-Bergstrom International Airport, and wastewater treatment improvements.

A proposed ~$51.5 million will go to the Homeless Strategies and Operations department, including allocations for Rapid Rehousing, Permanent Supportive Housing, and the HEAL initiative.

Emergency services will see investments including an additional 62 sworn EMS positions, funding for the Expanded Mobile Crisis Outreach Team, wildfire prevention equipment, and expanded firefighter training.

This budget prioritizes park and green space improvements, including $8.2 million in additional funding for maintenance and restoration.

The City of Austin also included funding for the new Austin Arts, Culture, Music, and Entertainment department, which launched this year.

What do you want to know about the upcoming budget? Share your thoughts with us.