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San Antonio proposes cuts to economic development budget, keeps 0% loan and corridor leadership program
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Summary
City officials previewed the proposed fiscal 2026 Economic Development Department budget that reduces general fund support, eliminates the one-time construction grant line, and preserves targeted small-business lending and quarter leadership programming while trimming staff by two positions.
San Antonio’s Economic Development Department on Tuesday outlined a proposed fiscal year 2026 budget that reduces general-fund support while preserving targeted small-business programs and continuing incentives for business recruitment.
Brenda, the city’s economic development director, told the City Council during the budget work session that the department’s proposed general fund for FY26 is $8,900,000 — a 19.8% reduction from the FY25 adopted general-fund total. She said restricted funds total $9,700,000 and that overall staffing would drop from 42 to 40 positions.
The proposed reductions occur amid continued work to implement the Economic Development Strategic Framework that the council accepted in October 2022, Brenda said. “I’m incredibly grateful for their efforts day in and day out,” she said of department staff while previewing the spending plan and specific program changes.
Why it matters
City leaders said the changes refocus limited general-fund dollars while maintaining tools that officials said support business retention, corridor revitalization and company attraction.
What’s in the proposal
- The draft budget eliminates a $1,400,000 line that previously funded a small-business construction grant program (a one-time allocation that had been supported with ARPA funds in prior years). The department said the program was not included in FY26 because there were no new corridors that met the program’s timing eligibility.
- The construction-mitigation program is reduced from $500,000 to $350,000; other supports tied to that program — such as signage, free Visit San Antonio memberships, activation funding and the Buy Local savings pass — are retained, Brenda said.
- The administration proposes a $500,000 allocation for a 0% interest loan program operated with LiftFund to provide interest-free capital to eligible small businesses. The department said the loan program has been augmented in previous years with ARPA funds and partner contributions and that since 2016 about 380 businesses have used the program; in the last two years combined, matching funds and ARPA augmented loans that totaled more than $5,000,000 and served 161 recipients.
- A $250,000 investment is proposed to continue the Revitalize SA quarter leadership program (a placemaking and corridor leadership pilot developed with Main Street America). The department said 32 participants across corridor cohorts have completed the two-year pilot and that projects produced through the program will seek outside resources for implementation going forward.
- The proposal preserves funding for targeted supplier-engagement staffing (two positions supported through restricted funds) and continued use of the city’s Economic Development Incentive Fund for company recruitment, growth-stage grants and programs such as LaunchSA and SupplySA.
Questions from council members and staff responses
Council members pressed department staff for more outcome data and return-on-investment information. Mayor Jones asked for analysis showing how city dollars translate into sustained business outcomes (for example, whether recipients remain in business, grow revenue or hire employees years after assistance). Brenda said staff would provide follow-up materials on outcomes and suggested the city tracks program outcomes through periodic surveys and monitoring.
Several council members, including Council Member Munguia and Council Member Galvan, asked for further review or reconsideration of the construction mitigation grant cut. They cited examples of major construction projects that will affect downtown and commercial corridors and asked staff to explore eligibility changes or additional funding sources so businesses affected by upcoming projects (such as Marbach and Market Square-area construction) could be eligible.
Council members also asked for clearer performance metrics that link incentive monitoring to tax and job outcomes; Brenda said the department conducts semiannual monitoring of incentive agreements and periodic outside economic-impact assessments of the incentive portfolio.
Context and constraints
Brenda said one ongoing shift affecting local attraction work is Greater SATX’s change to a per-capita funding model; the city’s contribution will decrease as Greater SATX’s model moves to a 35-cent-per-capita structure, reducing the city’s annual payment by about $70,000. She also noted the department plans an update of the Economic Development Strategic Framework during FY26 to assess the last four years of investments and identify priorities going forward.
Ending
Council members asked for more written follow-up on program outcomes (including case examples of businesses helped by the construction mitigation grants and the 0% loan program), and staff agreed to provide further materials. No formal budget vote took place at Tuesday’s work session; the presentation and council questions were part of the budget development process ahead of formal council decisions.
