Austin budget building: Your council member's concerns, priorities heading into work sessions

AUSTIN (KXAN) -- Austin City Council members are in for a busy few weeks of budget work sessions before their Aug. 15 deadline to adopt a city budget for the next fiscal year.

The first of many discussions was held Tuesday morning after City Manager TC Broadnax presented his proposed draft budget to council members. The budget draft was released to the public minutes before midnight on July 11.

The proposal would set the city’s budget over $6 billion, with a $1.5 billion General Fund. 

Nearly every council member took time Tuesday to ask questions and voice initial concerns about the budget proposal.

Mayor Pro Tem Vanessa Fuentes, who represents District 2, called it a "Band-Aid budget," and said she worries that it's “kicking the can down the road." Councilmembers Ryan Alter, District 5, and Mike Siegel, District 7, echoed some of Fuentes' concerns.

As part of the budget process, council offices will host town halls related to the budget and gather public input, and then work through amendments and vote on the budget in August.

The first council budget work session and community input session is scheduled for next Wednesday, and there are council work sessions planned every week until the adoption deadline on Aug. 15.

KXAN reached out to each district's office to ask what their councilmembers' initial priorities and concerns are after hearing the proposal presentation Tuesday.

Below are their responses, as well as some of their comments and questions that were voiced during Tuesday's budget discussion. Many of the concerns related to significant adjustments to General Fund expenditures, which include:

• No assumed wage adjustment for civilian staff.
• Reduction of $16.8 million, or 22.5%, in the budget for social services contracts.
• Elimination of the transfer to the Housing Trust Fund, budgeted at $11.1 million in FY 2026.
• Elimination of the transfer to the Capital Rehabilitation Fund, budgeted at $8.0 million in FY 2026.

District 1, Natasha Harper-Madison

Harper-Madison did not take much time to ask questions or voice concerns during the budget discussion Tuesday, rather, she encouraged fellow councilmembers to be succinct and try not to "belabor questions" during upcoming budget work sessions.

Harper-Madison's office sent the below quote from her on Wednesday:

"My primary focus continues to be my HEMs: Housing, Economic Opportunity, and Mobility. As we navigate the new budget, my priorities will be insuring continued access to equitable and affordable housing, support for our small business community, and providing safe, multimodal mobility options throughout the District. I also want to make sure that the City continues to have a solid financial foundation upon which it is able to provide quality services to our community."

District 2, Mayor Pro Tem Vanessa Fuentes

"There are significant changes that are being made in our budget, and I realize it’s a balanced budget, I just wanna make sure we take time to unmask all of the changes that have been made."

Fuentes brought up several different concerns and questions during the budget discussion on Tuesday, saying that while the proposed budget is balanced, she worries about the significant changes made and wants to ensure they’re the best option.

“What I see and what I believe we have before us is a Band-Aid budget, a budget that has Band-Aid solutions,” Fuentes said. “There’s a lot of movements that have been made here — taking from our reserve funds, we had staff restructuring, we had cuts on overtime, we’re zeroing out our housing trust fund, we’re lessening our facilities management fund.”

“There are significant changes that are being made in our budget, and I realize it’s a balanced budget, I just wanna make sure we take time to unmask all of the changes that have been made as a part of this proposal,” Fuentes said.

Lang said that the major changes Fuentes pointed out were highlighted in the plan for Fiscal Year 2027, and that the cuts that were made had “minimal impact” on staff and services.

Fuentes reiterated the cuts the proposed budget would bring in Fiscal Year 2027, specifically, an anticipated nearly $17 million reduction in social service contracts. She asked Lang and the budget staff where those cuts would come from.

According to the budget proposal document, there is a reduction of $16.8 million, or 22.5%, in the budget for social services contracts.

Lang said the exact contracts that will be affected have not yet been identified, but one option is a 20% decrease across all social service contracts.

Fuentes also asked how federal funding reductions have impacted the proposed base budget. Lang said the city was able to move staff members to other positions or departments to offset the reduction in funding.

Otherwise, the budget department "has a number of grants that they're watching but have not received final notice that those grants have ended," Lang said.

That means the budget does not include any gap funding built into it to cover potential costs created by potential federal funding reductions.

District 3, José Velásquez

Velásquez's office sent KXAN the following statement on his budget priorities:

District 3 and the City of Austin as a whole is facing a homelessness crisis. My top priority is to get our unhoused neighbors the resources and housing that meets their needs.

In addition to addressing homelessness, with federal funding cuts to crucial services impacting vulnerable people nationwide, we are focused on trying to mitigate negative outcomes for Austinites most in need. 

This includes serving Austin’s lower- and middle-income families, essential workers, marginalized communities and unhoused neighbors who continue to need support during challenging economic times. Some of those resources are provided through critical programming such as those listed below; 

• AISD Parent Support Specialists 
• Family Justice Center
• Community Violence Intervention
• Harm Reduction 
• HIV/STI Testing

District 4, José 'Chito' Vela

Vela started his comments Tuesday by thanking the fire chief and police chief for overtime reductions that add up to $8 million and $9 million, respectively, going back into the budget. "Ultimately long-term controlling the budget is a matter of controlling public safety costs," Vela said. "That's gonna go a long way toward closing that gap."

Vela asked what the Hotel Occupancy Tax Collections on short-term rentals are looking like so far, but since STRs only just started collecting that tax in April, there is not yet reportable information, budget staff said. He noted that it'd be interesting to see if there's an increase in revenue from those collections.

Vela also asked about a mention of salary adjustments for "hard-to-fill" positions within the city and what those positions were. The city's HR director said those were primarily trades jobs like IT, engineering, electrical, etc., and that the city wanted to ensure those positions are fairly compensated and competitive with the private sector. They spent some time during the meeting discussing cost allocations and transfers specifically for IT programs the city is budgeting for, as well.

Vela pointed out that the Housing Trust Fund would be zeroed out by Fiscal Year 2027 and asked where that money would be going. According to Lang and the budget proposal document, most of that money is going to the Marshaling Yard, with some going toward the Housing Voucher program, the Displacement Mitigation Plan, and Emergency Rental Assistance. Vela said he agrees that the Marshaling Yard needs to continue being funded, but he's concerned about emptying out the Housing Trust Fund.

He also brought up the planned closure of the Recycled Reads storefront on Burnet Road. Those operations will be absorbed across the library system, according to budget staff.

Vela also asked what the current count of sworn police officers was, and how many the proposed budget planned for. Right now, there are 1,420, and the budget accounts for 1,819.

District 5, Ryan Alter

"This budget does more than just cut out fat, we’ve hit some bone."

Alter reiterated some of Fuentes' concerns with the budget, saying, "This budget does more than just cut out fat, we’ve hit some bone, and you look at next year, and we go through the bone."

“Make no mistake, these costs show up somewhere. If we don’t bring an individual off the streets and into a house, we pay for them in an emergency room, through APD response, homeless strategy office response, our jails…” he said.

During Tuesday's discussion, he also asked about city contributions for employee healthcare, clarification on the living wage adjustment, and why the Counsel at First Appearance program funding was moved from the municipal court to APD. Lang said it's essentially because APD is the "appropriate place for that contract," since police handle jail bookings.

District 5 Chief of Staff Ben Leffler sent the following statement from Councilmember Alter on Wednesday:

"CM Alter is focused on ensuring that the budget fully funds homelessness services — and specifically those targeting youth experiencing homelessness, and that it addresses the current shortfalls in parks maintenance and operations, continues necessary EMCOT funding, and includes smart investments to address local climate impacts. Each of these has a positive return on investment for our community and the individuals they impact, both in the short and long term."

District 6, Krista Laine

"My focus remains on practical, people-centered investments that will keep District 6 connected, safe, and resilient."

Councilmember Laine said Tuesday she appreciated "seeing the beginning of some of the restructuring that will lead to savings that can be invested in what we as a city view as our core values."

Laine asked several questions during Tuesday's meeting, starting with the budget's reserve level, which is at 15.8%, and whether it's high enough to maintain the city’s financial rating. According to the budget document, city financial policies target a reserve level of 17% of ongoing General Fund expenditures.

Laine also expressed concerns over the city’s commitment to paying for roadway elements of the “caps and stitches” planned over TxDOT’s I-35 project. She also asked about Austin's sales tax results compared to peer cities, property tax modeling as Austin moves toward a more renter-based population, and if the $900,000 allocated to Transportation and Public Works’ Construction Partnership Program would be enough to integrate projects planned in District 6.

Laine wrote a statement about her budget priorities for this cycle, which her office shared via email Wednesday:

I am grateful for the opportunity to advocate for stronger investments in District 6 during the 2025-2026 budget cycle. I also recognize the undeniable challenges the City is facing as funding sources are shrinking or disappearing. I believe it's more important than ever to focus our limited resources on projects that will have the most meaningful and long-term impact for our communities.

As a high-growth city, Austin must continue investments that close gaps in access and reliability to core city services, so that all of our residents can enjoy all that this city has to offer.

Safe, accessible, transit options must be expanded in outlying areas – including both active transportation options like urban trails and express transit connections from outlying areas to key destinations in the central city.

Transit investment should strategically target lower-dollar, higher-impact investments that leverage infrastructure that has already been built – especially in high-growth areas like Lakeline Station and the FM 620 corridor, which have steadily absorbed many residents displaced from the central city.

Park maintenance and access to parks should continue to be a high priority, including investments in pocket parks, trails, and safe crossings to improve access to parks. We need to continue to leverage available grants and partnerships to develop and maintain our parks for recreation, transportation, and crime prevention purposes.

In the area of public safety, I believe we need to re-evaluate how we manage emergency communications. Our current system deserves a more strategic and efficient approach. I also want to provide funding for the Williamson County Child Advocacy Center, which serves many Austin residents, and maintain support for Canyon Creek Fire/EMS Station’s sworn staff. Additionally, I support further investment in wildfire and flood prevention through expanded use of digital tools for real-time tracking, forecasting, and improved coordination between agencies.

As we navigate difficult budget decisions, my focus remains on practical, people-centered investments that will keep District 6 connected, safe, and resilient. I am committed to advocating for a budget that reflects the needs and values of our community while preparing us for the challenges ahead.

District 7, Mike Siegel

"The budget signals deep, permanent cuts to public health programs that our City absolutely needs, especially in light of recent cuts to tens of millions of dollars in federal grants."

Siegel also agreed with the “Band-Aid” budget point, saying that the “cavalry is not coming,” and that Austin has to show up for itself.

“This is by no means an end point, this is a starting point for an ongoing conversation,” Siegel said. “I’m hopeful that we can show up for Austin… keep Austin what it is despite what’s happening at the state and federal levels."

Siegel asked what programs and positions will lose funding due to the loss of funds from the American Rescue Plan Act. Lang said about six case management positions in the Austin Community Court would lose funding, and a couple in public health, but she wasn't certain which.

Siegel also asked about the $16.8 million cut from social service contracts, and Lang said there are not yet specific contracts identified for those potential cuts. He also said he had several questions on the Housing Trust Fund that Councilmember Vela discussed.

Siegel's office shared additional notes from the District 7 council member via email Wednesday:

• “Housing and affordability remain a top concern across the City. One objection I have to the budget is zeroing out the Housing Trust Fund to pay for one year of shelter operating costs, with no plan for how to continue operations once the fund is depleted. These dollars come from developers who paid a "fee in lieu" of providing onsite affordable housing, and we need to make sure we are using those dollars to build permanent affordable housing options for Austin residents."
• "The budget signals deep, permanent cuts to public health programs that our City absolutely needs, especially in light of recent cuts to tens of millions of dollars in federal grants. I'm absolutely committed to maintaining these critical programs so that all of our residents can thrive."
• “I’m also looking at funding opportunities that will both improve outcomes and see returns on investment, such as creating a climate revolving fund to encourage energy efficiency and adding lower-cost emergency vehicles to our fleet so that we can improve emergency response times and free up ambulances for higher-need calls.”

District 8, Paige Ellis

Ellis started by asking how much money the city is owed in federal reimbursements from programs like FEMA. Lang said for FEMA specifically, the city is owed about $38 million in reimbursements, and they're still awaiting a final decision on those. She said those reimbursements would impact the reserve fund.

Ellis also asked about cost of living adjustments and whether compression is being sufficiently addressed. Lang said the budget staff worked with the city's human resources department to ensure it was.

She also asked for clarity on incremental increases to the cost the city covers for health insurance for sworn employees, improvements to youth athletic fields, and the elimination of funding for the Neighborhood Partnering Program. As for the Neighborhood Partnering Program, Lang said the projects that have been committed to will be completed through prior bonds.

District 9, Zohaib 'Zo' Qadri

Qadri asked a handful of questions about the budget related to staffing within different departments. Below is a summary of those questions and the answers provided by budget staff.

Qadri pointed out that there will be more personnel dedicated to the Mobile Integrated Healthcare and Community Paramedic service. He asked what the roles are, and what the responsibilities for those positions will be.

Budget staff said those are not new positions that are being added, but a restructuring internally.

Qadri also pointed out 12 new FTEs (Full-Time Equivalent positions) in the Homeless Strategy Office that are dedicated to outreach and encampment management. He asked for the details on those positions.

David Gray with the Homeless Strategy Office said those positions will do the work that the office currently only has two part-time staff members doing, and that they'll help provide quicker response times to 311 calls and improvements in the office's ability to get people off the streets and out of encampments and into shelters.

Qadri asked about two positions that are being eliminated from the Office of Police Oversight. Lang said one of those positions was a transfer and the other was a vacancy that is no longer needed.

District 10, Marc Duchen

Duchen on Tuesday discussed a handful of topics, including what he said was "unprecedented spending" for the Capital Improvement Plan, and Austin's revenue and spending compared to other cities.

Duchen office sent a statement to KXAN on Wednesday regarding the proposed budget:

The city’s budget has continued to grow each fiscal year, burdening Austinites at a time when their community has become increasingly unaffordable. Now we’re looking at a significant budget shortfall, something City Hall hasn’t faced for years. My staff and I are studying the proposed budget right now, seeing if there are areas where spending may need to be adjusted. We may find redundant or ineffective initiatives, staff positions which have gone unfilled for long periods and are therefore necessary, excessive no-bid contracts, and more. Voters fund these efforts, and my colleagues and I must be responsible stewards of their money.

One budget area the City Council needs to focus on is Austin Energy’s revenue, which I believe should be partly used to upgrade our electrical infrastructure. The ability to provide Austinites with electricity and other basic services is a public safety issue, and those services were knocked out for thousands of residents by a strong storm this past spring. Austin will continue to face destructive weather like this, and Austin Energy’s revenue needs to be reinvested in a way that ensures the reliability of our power grid.

Next steps

July 23: Council budget work session and community input session
July 29: Council budget work session
July 31: Council budget work session and public hearing on the budget
August 5: Council budget work session
August 7: Council budget work session
August 13 – 15: Budget and Tax Rate Adoption by City Council

Read the full FY 2025-26 Proposed Budget Document here, and find more information about the budget process online.