City of Austin FY 2026-27 Proposed Budget: A Taxpayer’s Guide
Analysis based on the City Manager’s Proposed Budget, Volumes I and II, the Taxpayer Impact Statement, the Typical Tax and Ratepayer Statement, and the Message from the Manager.
The Big Picture
City Manager T.C. Broadnax’s proposed FY 2026-27 budget totals $6.6 billion across all City funds — an increase of $301.1 million, or 4.8%, over the FY 2026 amended budget. In his budget message, Broadnax frames this as an effort to build “fiscal stability and long-term sustainability” in the face of three persistent pressures: the state’s 3.5% cap on annual property tax revenue growth, volatile sales tax collections, and uncertain federal funding.
The plan is balanced through a mix of rate increases, targeted reductions and reallocations within the General Fund, and continued reliance on debt financing for capital projects. For the average Austin household, it translates into higher bills across nearly every City-provided service — property taxes, electricity, water, trash, and drainage — even as the City touts efficiency reviews and reallocation of existing dollars toward priority services.
What It Means for Your Wallet
This is the number most residents will care about most.
The City’s own “Typical Tax and Ratepayer Statement” lays out the combined annual impact on a typical Austin household:
| Bill | FY 2026 | FY 2027 (Proposed) | Increase | Basis |
|---|---|---|---|---|
| Austin Energy | $1,404.84 | $1,448.76 | +$43.92 | 860 kWh/month usage |
| Austin Water | $1,198.92 | $1,292.04 | +$93.12 | 5,800 gal water / 4,000 gal wastewater |
| Austin Resource Recovery (trash) | $435.60 | $456.00 | +$20.40 | 64-gallon cart |
| Clean Community Fee | $123.00 | $127.20 | +$4.20 | Per single-family home |
| Transportation User Fee | $261.60 | $261.60 | $0.00 | No increase proposed |
| Drainage Utility Fee | $168.60 | $179.04 | +$10.44 | 3,100 sq ft home, 37% impervious cover |
| City Property Tax Bill | $2,074.28 | $2,248.15 | +$173.87 | Median homestead, net of 20% exemption |
| Total Combined Impact | $5,666.84 | $6,012.79 | +$345.95 | 6.1% increase |
Property taxes are the single largest driver of the increase, accounting for exactly half of the total dollar impact. The Transportation User Fee is the only line item held flat.
Property Taxes in Detail
- The proposed tax rate is $0.579530 per $100 of assessed value, up from $0.524017 in FY 2026 — an increase of nearly 10.6% in the rate itself.
- Of that rate, $0.443754 is the maintenance & operations (M&O) rate and $0.135776 is the debt service rate. The M&O rate sits right at the 3.5% no-new-revenue cap allowed without a voter-approval election, consistent with the last several years.
- Citywide taxable property value is projected to fall 3.4% to $222.0 billion, even as $3.2 billion in new construction is added to the roll — meaning existing property values are declining while the City still needs more total tax revenue.
- The city-wide cover-page disclosure required under Texas law states this budget “will raise more total property taxes than last year’s budget by $82,412,572 or 6.8%,” with $18.4 million of that coming from newly added property.
- For the median-valued homestead ($484,907 assessed value before the 20% homestead exemption), the annual City property tax bill rises from $2,074.28 to $2,248.15 — an 8.4% increase, notably higher than the 3.5% M&O cap because the debt-service portion of the rate isn’t subject to that limit and because median home values are falling less than the average taxpayer might assume.
- Homeowners 65+ or with disabilities get some relief: the additional homestead exemption for those groups was raised from $192,000 to $204,000 in assessed value (Council action, May 2026).
Utility and Fee Increases
- Austin Energy: A 5% base rate increase plus higher regulatory (ERCOT transmission) charges push the typical residential bill up 3.1% overall, though the Power Supply Adjustment and several Community Benefit Charge components are actually decreasing.
- Austin Water: The typical bill rises 7.8%, driven mainly by a 9–12% increase in volumetric (usage-based) charges for both water and wastewater.
- Austin Resource Recovery: Base customer fees and cart fees are both rising modestly to help fund fleet costs and debt service on the new Northeast Service Center.
- Watershed Protection (Drainage Fee): Up 6.2%, funding storm drain rehabilitation and 18 new positions.
- Low-income and vulnerable customers have some protection: Austin Energy’s and Austin Water’s Customer Assistance Programs (CAP) discount bills by roughly 26–49% depending on the charge, and a Multifamily CAP program provides a $17/month credit to renters without individual water meters.
How Austin Compares
The City notes it has historically had the lowest tax rate and highest median family income among major Texas cities, and touts that this keeps its property-tax-to-income ratio competitive with Dallas, Fort Worth, Houston, and San Antonio — though that ratio has been ticking upward recently as home price declines slow and the tax rate climbs by “nearly 10%.”
Where the Money Goes
General Fund (day-to-day city services): $1.54 billion
The General Fund — which covers police, fire, EMS, parks, libraries, and similar core services — grows by $53.1 million (3.6%) to $1,538.9 million. Public safety dominates:
- Police, Fire, and EMS together account for 64.7% of General Fund spending ($994.6 million) — Police alone is 35.8% of the fund.
- Community services (libraries, parks, health, homelessness, courts) make up 29.3% ($450.4 million).
- Notable department-level changes include a $24.2 million increase for Police, an $18.9 million increase for Fire (including $6 million more in overtime to maintain four-person staffing), and a striking $22.0 million increase for the Homeless Strategy Office — driven substantially by an internal realignment that moves shelter operations funding from the Social Services Grants line rather than genuinely new spending.
- Social Services Grants funding to third-party providers is being cut by roughly $5.1 million as part of a “contract reduction strategic framework,” alongside a $2.9 million reduction to the Travis County sobering center contract (offset one-time by reserve funds).
- Other reductions include eliminating the Creative Space Assistance Program ($500,000), a $5.8 million technology savings from consolidating IT systems under the “ONE-ATS” initiative, and various vacant-position eliminations across Development Services, Municipal Court, and Parks and Recreation.
Citywide Operating Budget by Fund
| Fund Category | FY 2026 | FY 2027 | % Change |
|---|---|---|---|
| General Fund | $1,485.8M | $1,538.9M | 3.6% |
| Enterprise Funds (Austin Energy, Water, Aviation, etc.) | $4,173.5M | $4,381.5M | 5.0% |
| Internal Service Funds | $950.2M | $1,086.0M | 14.3% |
| Special Revenue Funds | $672.7M | $661.3M | (1.7%) |
| Debt Retirement Funds | $860.1M | $1,020.5M | 18.6% |
Enterprise operations — Austin Energy (30% of citywide spending) and Austin Water (13%) — dwarf the General Fund in dollar terms because they’re self-supporting utilities, not tax-funded. Debt service is growing fastest (18.6%), reflecting the City’s expanding capital program, especially at the airport.
Three departments drive over half of the total citywide increase: Austin Energy (+$62.6M), Austin Water (+$37.5M), and Aviation (+$62.1M, 13.9%) — the latter reflecting the ongoing airport expansion.
Workforce and Compensation
- The budget funds 16,767 full-time equivalent positions, a net increase of 225 (1.4%).
- Civilian employees get a 3.0% base wage increase ($35.4 million citywide cost); the City’s minimum wage rises from $22.05 to $22.15/hour.
- Police get a contractual 5.0% increase and Fire a contractual 3.0% increase under their respective multi-year labor agreements.
- Health insurance premiums are increasing for the first time in several years for PPO plan members (other plans stay flat), and the City’s per-employee health contribution rises 5.0% to $17,216/year.
- The City’s total contribution across its three pension systems (COAERS, Police, Fire) rises to $340.3 million, up from $324.1 million. Funding ratios remain a concern: COAERS is 63.1% funded, the Police system 59.7%, and Fire 76.9%, with unfunded liabilities of roughly $2.3 billion, $790 million, and $350 million respectively. The City notes pension reform efforts contributed to Fitch upgrading Austin’s credit rating back to AAA in 2025.
- As part of the “ONE-ATS” IT consolidation, 191 positions are being transferred into Austin Technology Services from 15 departments — framed as an efficiency move, not job cuts.
Reserves and Financial Cushion
The General Fund’s two reserve accounts (Emergency Reserve Fund and Budget Stabilization Reserve Fund) are projected to end FY 2027 at a combined $260.5 million, or 17.0% of ongoing General Fund spending — meeting the City’s own policy floor. This is a modest improvement of $2.1 million over FY 2026 projections, suggesting the City isn’t drawing down its cushion to balance this budget, though $4.3 million of one-time reserve money is being used for specific capital and gap-funding needs (including sobering center funding).
Capital Spending: $6.2 Billion in New Authorizations
Separate from day-to-day operations, the City is authorizing $6.2 billion in new capital appropriations for FY 2027 (with $4.3 billion actually planned to be spent that year). Notably:
- Nearly 40% of new capital authority ($2.4B+) is commercial paper for Austin Energy and Austin Water — short-term debt instruments typically refinanced later, meaning ratepayers will ultimately bear these costs through utility rates.
- Airport Revenue Bonds account for 24.6% ($1.5 billion), reflecting the continued Airport Expansion and Development Program (new concourses, parking garages) — this cost is recovered through airline fees and airport revenue, not general taxes.
- Only a small slice (1.5%) is traditional General Obligation debt for general City infrastructure like streets and parks, meaning most of the capital program is funded by the utilities and airport rather than general taxpayers directly — though debt service costs still flow through to utility bills and, to a lesser extent, the tax rate.
- New facilities coming online (Public Safety Headquarters, renovated Austin History Center, Joan Means Khabele Bathhouse, new airport concourses) carry ongoing operations and maintenance costs baked into the operating budget — roughly $8-9 million combined in new O&M costs and associated staffing identified for FY 2027.
Key Takeaways for Austin Taxpayers
- Expect a real, noticeable increase in your combined City bills — about 6.1%, or roughly $346/year, for a typical homeowner with median utility usage, with property taxes responsible for half of that increase.
- The property tax rate is rising to essentially the maximum allowed without triggering a voter-approval election (3.5% M&O growth cap), even as overall taxable property values in the city are falling — a sign of continued strain between state-imposed revenue limits and the City’s cost growth (wages, pensions, debt service).
- Public safety continues to dominate General Fund spending (nearly two-thirds), with Police, Fire, and EMS all receiving budget increases, alongside continued investment in homelessness services, though the latter’s large percentage increase partly reflects fund realignment rather than all-new money.
- Some social service and third-party grant funding is being trimmed to redirect dollars toward City-operated shelter and priority programs — worth watching if you rely on or support community nonprofit service providers.
- The City is leaning on utility rate increases and debt to fund major infrastructure (airport expansion, water/energy system upgrades) rather than general tax revenue, which somewhat insulates the property tax rate from these costs but raises utility bills instead.
- Financial fundamentals look stable but pension liabilities remain a long-term watch item — reserves meet policy targets and the City’s credit rating was recently upgraded to AAA, but all three pension systems remain less than 80% funded.
Note: As of when this budget went to print, Austin had not yet received certified appraisal rolls from the Travis, Williamson, and Hays Central Appraisal Districts, so the property tax figures above are estimates and may change before final adoption.
Residents of Taylor — a fast-growing city near Samsung’s semiconductor campus outside Austin — have been pushing back against data center development, citing concerns about water use, electricity demand, and noise. A group called the Halt Taylor Data Centers coalition gathered about 1,400 signatures for a petition that sought to prohibit new data centers under the city’s current zoning until Taylor creates zoning rules specifically for digital infrastructure. They formally submitted the petition on July 9.
The meeting: On Thursday night (July 9), a packed and emotional crowd showed up expecting the City Council to debate the proposed data center ban. About 15 minutes into the meeting, while residents were speaking in support of the petition, the city announced on social media that the proposal could not move forward — leaving many to learn of the decision online rather than from council members.
The legal reasoning: City leaders said, after certifying petition signatures and consulting outside legal counsel, the measure cannot move forward through the initiative process or be placed on the ballot because Texas law does not allow zoning changes by popular vote. Mayor Pro Tem Kelly Cmerek said this is a determination about the legal process available to the city, not a judgment on the concerns raised by the community.
Community reaction: Frustration was compounded by the timing.
Mayor Jim Buzan was absent from the meeting, and residents expected council members to discuss the ordinance, but the mood shifted when people noticed the city had posted on social media mid-meeting that the petition wouldn’t be considered. Organizer Carrie D’Anna said the coalition isn’t backing down, warning that if council won’t advocate for them, the issue will go back on the ballot in November for voters to decide.
The apology: The next day (Friday), City Manager Brian LaBorde apologized for the timing of the announcement, posting the statement to the city’s Facebook page and saying the council had no prior knowledge the announcement would be posted when it was.
What’s next: The city says it’s continuing to develop new data center regulations through updates to its Comprehensive Plan and Land Development Code, including environmental protections, water conservation measures, noise mitigation, and neighborhood compatibility requirements. It’s accepting public comment throughout July, with an ordinance expected before Council in September.
LaBorde also said the city is working to schedule a community meeting in the coming weeks to further explain the legal constraints Texas cities face.
Taylor would not have been the only Central Texas city to restrict data centers this way — San Marcos became the first city in the state to ban them last month, and this fight is part of a broader statewide debate over data center growth, water, and grid strain.
PODCAST
(Episode from July 10, 2026)
The development could take 28 years to finish, but ultimately it’s expected to include industrial, retail, office and hospitality space — on a huge scale (Austin Business Journal)
A new Austin city ordinance will give renters a clearer picture of what they’ll pay before signing a lease.
Austin Energy has scheduled a planned maintenance outage affecting selected customers in parts of Downtown Austin and West Campus.
Some downtown residents are questioning the timing.
PODCAST
For those experiencing homelessness in Austin, support can come from a variety of nonprofits and community programs. One such organization is Mobile Loaves & Fishes, the nonprofit founded by Alan Graham that has earned national recognition for Community First! Village, a master-planned community providing affordable, permanent housing for people coming out of chronic homelessness.
Graham discusses how Community First! Village grew from a single R/V to a thriving community in East Austin. Now home to more than 420 residents, Community First! Village has become a national model for permanent supportive housing, with plans to ultimately serve 1,900 residents.
The conversation explores the enduring challenge of homelessness in Austin, addressing common misconceptions about the people served by Mobile Loaves & Fishes and other nonprofits. Graham also explains why homelessness is a solvable issue for cities like Austin and why communities should invest in long-term housing solutions that restore dignity, stability and connection.
(Episode from July 10, 2026)
BREAKING (2:00 pm UPDATE)
An officer-involved shooting downtown near Austin’s Amtrak station this morning leaves one person dead. Two officers were involved after reports of a man with a handgun this morning in area of West Cesar Chavez and South Lamar.
Austin’s 35th homicide of the year occurred early this morning in South Austin.
Leander police responded to a call Friday evening involving reported gunshots at the Southbrook Apartments. A suspect was taken to a local hospital with minor injuries and then to the Williamson County Jail.
A former fifth grade American Sign Language teacher at Baranoff Elementary School has been sentenced for possessing thousands of files depicting child sexual abuse. Carl David Innmon had previously substituted at approximately 20 other AISD schools.
Austin police are searching for a suspect involved in a theft and credit card abuse case originating in the downtown area back in March. This individual and case are linked to an ongoing series of thefts in Austin’s downtown entertainment district.
The Travis County Sheriff’s Office issued warrants for two men in connection with a homicide in Austin early Sunday morning and says additional arrests could follow.
Austin’s police union responded online about the prior criminal histories of the two suspects:
Are homicides in Austin on track to outpace last year’s numbers?
ICE activity was reported early Friday in North Austin, specifically in the area of Rundberg and Metric, as well as North Lamar and Fairfield.
A new zipline park in New Braunfels, a luxury apparel brand coming to San Marcos Premium Outlets, a dessert shop closing in Georgetown and other ATX business news from Community Impact.
San Marcos officials say they have their first detected case of West Nile virus of the year.
WEATHER
FRIDAY’S HIGH / LOW TEMPERATURES
AUSTIN-BERGSTROM INTERNATIONAL AIRPORT
CAMP MABRY
FRIDAY’S PRECIPITATION TOTALS
As isolated storms rolled through Austin Friday evening, the airport saw over one inch of rain while Camp Mabry saw just a trace.
AUSTIN-BERGSTROM INTERNATIONAL AIRPORT
CAMP MABRY
5-DAY FORECAST / AUSTIN, TEXAS
Texas A&M Forest Service is reporting three active wildfires in the state this morning. They provided updates on them last night.
Mexico plans to pursue criminal and civil action in the United States over the deaths of Mexican nationals in ICE custody and enforcement operations, President Claudia Sheinbaum said Thursday. (KUT 90.5)
The announcement comes after an ICE agent fatally shot 52-year-old Mexican immigrant Lorenzo Salgado Araujo during an enforcement operation in Houston’s Magnolia Park neighborhood on July 7. Salgado had lived in the United States for decades and had a work permit application pending.
Foreign Minister Roberto Velasco said Mexico has recorded 17 deaths of Mexican nationals linked to ICE since the start of the current U.S. immigration crackdown: 14 in detention centers and three during enforcement operations, including Salgado Araujo. (Houston Public Media)
Almost none of the state’s major Republican officials have weighed in on the killing of a Houston man by federal agents, and U.S. Rep. Sylvia Garcia of Houston said she had not spoken with Gov. Greg Abbott. (Texas Tribune)
Texas Rep. Roland Gutierrez is asking Gov. Greg Abbott for answers:
(Episode from July 10, 2026)
The latest on this week’s fatal shooting by ICE in Houston, described by Mexico’s president as part of a broader pattern of mistreatment of Mexican migrants. We’ll talk with reporters in Houston and in Mexico City.
Houston was rocked this week by ICE agents gunning down a grandfather who’s lived in the city for 35 years. Houston Chronicle Opinion Editor Evan Mintz joins the show with the latest on the investigation.
(Episode from July 10, 2026)
The Trump administration desperately wants the public to just tune out the shooting death of Lorenzo Salgado Araujo by ICE agents in Houston. But this roaming army of masked, armed men chasing people down and killing them is tied directly into the administration’s criminality across the board.
(Episode from July 10, 2026)
The state’s top Republican leaders are expressing support for only allowing registered Republicans to vote in GOP primaries.
The search for a gunman who shot four people at a high school graduation in Northern California, killing one, has ended with the arrest of a 17-year-old boy in Texas. (Los Angeles Times)
Republican Agriculture Commissioner Sid Miller says Democrats are right on the issue and is blasting Governor Greg Abbott for not calling an immediate special session to address data center regulation. Meantime in the first Texas city to ban data centers, San Marcos Council Member Amanda Rodriguez says it was the people who forced the ban and those folks were Republicans, Democrats, Independents, and a bunch of Texans who’ve never even engaged with politics before. You won’t find a bigger issue in the state right now. And in this episode of Y’all-itics, you’ll learn more about that first ban, how the state might respond, and you’ll hear some pretty harsh words coming from a Republican… about Republicans.
(Episode from July 10, 2026)
Texas Politics Reporter Haajrah Gilani, Chief Politics Reporter John C. Moritz and reporter Isaac Yu unpack a week of political reversals. They discuss why Texans are being pulled into the Graham Platner controversy in Maine, why Gov. Greg Abbott is handing the comptroller’s office to former rival Don Huffines, and how the Dallas RNC convention could shape Ken Paxton’s tightening race against James Talarico.
(Episode from July 10, 2026)
Three Guadalupe County detention officers face charges of violating a detainee’s civil rights, with two arrested and one expected to surrender, officials say.
Track the New World screwworm crisis at the Texas Tribune.
SPORTS
MLB: In-state and division rivals clashed in Arlington last night. The home team won.
Wyatt Langford and Jake Burger homered in a four-run eighth inning as the Texas Rangers beat the Houston Astros 7-3 on Friday night.
ON THE SCHEDULE
AL WEST STANDINGS
NBA: NBA star Victor Wembanyama has signed a long-term deal with the San Antonio Spurs.
The deal is for five years and worth $252 million, which is the NBA’s maximum for a rookie scale player extension.
2026 FIFA WORLD CUP: What a Friday it was in the FIFA World Cup! As the tournament enters its final stages, the drama is reaching a fever pitch. We had a magnificent European battle yesterday, and today promises to deliver even more blockbuster entertainment with a pair of massive quarterfinal matchups.
Friday’s Quarterfinal Recap
Spain 2 – 1 Belgium
Goals: Fabián Ruiz (30′), Mikel Merino (88′) — Charles De Ketelaere (41′)
Venue: Los Angeles Stadium (Inglewood, CA)
Spain became the next side to punch their ticket to the semifinals after securing a dramatic late 2-1 victory over Belgium. With the win, Spain sets up a mouth-watering semifinal clash against France this coming Tuesday in Arlington, Texas.
World Cup ticket prices are plunging now that the host countries got knocked out.
TODAY
| Matchup | Kickoff (CDT) | Venue | Broadcast Info |
| Norway vs. England | 4:00 PM | Miami Stadium (Miami Gardens, FL) | FOX, FOX One |
| Argentina vs. Switzerland | 8:00 PM | Kansas City Stadium (Kansas City, MO) | FOX, FOX One |
YouTuber Ryan Trahan travels to a FIFA World Cup match in Houston with a goal to spark a massive stadium wave. Joined by friends, Ryan documents the journey, attempts to master the logistics of soccer fandom, and shares Joyride candies with fellow attendees in a quest to energize the crowd.
