Galveston City Council Approves $235M Budget With 2% Salary Increase Proposal

The Galveston City Council meeting on August 28, 2025, centered around the proposed Fiscal Year 2026 budget, which totals $235.4 million for city operations and includes significant capital improvement projects. The budget also proposes a tax rate increase to support a 2% cost-of-living adjustment (COLA) for civilian employees, raising concerns among council members about the financial implications for residents.

During the meeting, City Manager Sheila Ladonye outlined the budget's key components, including a $42 million allocation for internal services and a projected ending fund balance of $73.8 million. The council is required to approve the budget and tax rate by September, following a public hearing that yielded no comments from citizens.

A motion was made to approve the budget with the added funding for the fund balance to maintain a 120-day reserve and the proposed COLA. However, this motion sparked a heated debate among council members. Some expressed strong support for the budget, emphasizing the need for financial stability and the importance of honoring commitments to city employees, particularly first responders. Others opposed the tax increase, advocating for a "no net new revenue" approach to avoid further financial burden on residents.

Council members raised concerns about the city's efficiency and the management of internal service funds, which have historically accumulated reserves that some argued should be returned to departments rather than held as excess. The discussion highlighted a fundamental divide on how to balance fiscal responsibility with the need for adequate funding for city services and employee compensation.

Ultimately, the council voted 4-3 in favor of the budget amendment, which includes the tax rate increase and COLA, signaling a commitment to maintaining financial reserves while addressing employee needs. The decision reflects ongoing tensions between fiscal prudence and the necessity of investing in city operations and personnel. The council will continue to navigate these challenges as they prepare for the upcoming fiscal year.