Austin manager proposes balanced FY‑26 budget that draws reserves, keeps pay raises and sets public hearings

City Manager T.C. Broadnax presented the City of Austin’s proposed fiscal 2026 budget on July 15, telling the council the plan is balanced while acknowledging it relied on one‑time reserves and identified deeper cuts that could be required in fiscal 2027.

“This is the first city of Austin budget that I’ve had the opportunity to guide from start to finish,” Broadnax said, adding the process began with an estimated $33,000,000 shortfall in the general fund and that the proposal the manager’s office submitted is balanced.

The proposal bundles $6.3 billion in all funds spending for FY‑26 and a $1.5 billion general fund. Key elements include a proposed 4 percent across‑the‑board increase for civilian city employees, a living wage increase to $22.05 an hour, investments in homelessness and encampment outreach, and a $2.9 billion capital budget. To balance the year, the plan taps $14.1 million from the budget stabilization reserve and programs one‑time funding from the housing trust fund; staff warned those one‑time choices and revenue constraints create pressure in FY‑27.

Why it matters

The proposal preserves many current services and some new investments while signaling constrained capacity going forward. Budget staff said policy limits on property tax growth, uncertainty in sales tax collections and reductions in some federal grants are forcing the city to use reserves and one‑time funds now and to consider service‑reducing options next year unless new recurring revenue is found.

What the proposal includes

- Compensation: A 4 percent across‑the‑board increase for civilian employees in FY‑26 and a living wage increase from $21.63 to $22.05. Carrie Lang, director of budget and organizational…