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County budget forecast warns of structural gap by 2027 without recurring cuts or new revenue
Summary
Bexar County finance staff presented a long-range forecast showing General Fund expenditures overtaking revenues by 2027 under current assumptions; staff recommended health-plan changes, caps on program changes, and reviewing ARPA-funded programs carried into the General Fund.
Bexar County budget staff told Commissioners Court on May 27 that under current assumptions the county’s General Fund will become structurally imbalanced within the next several years unless officials identify recurring budget savings or new recurring revenues.
Tanya Gaethon, Budget and Finance director, presented a multi-year forecast based on second-quarter estimates and fiscal-year-to-date data. Gaethon said the county began fiscal 2025 with an additional $190.3 million transferred into the General Fund earlier this fiscal year, and that a larger-than-anticipated fiscal 2024 revenue haul—primarily investment earnings and property tax receipts—helped lift the fund balance. Still, the forecast projects expenditures will exceed revenues beginning in fiscal 2027 and the county will consume fund balance in later years unless structural changes are made.
“The general fund is structurally balanced with $669,000,000 in revenue and $660,000,000 in expenditures,” Gaethon told the court, adding that the Budget Office projects revenues for fiscal 2025 to be $44.9 million higher than certified and that the county expects $81.7 million in expenditure savings tied largely to multi-year ARPA projects that are being carried forward.
Property-tax assumptions in the forecast assume 3% growth (2% from new property plus 1% from existing properties) and conservative declines from the April preliminary appraisal report to July certifications. Gaethon described home sales cooling, rising months of inventory and slower new-building permit growth in 2025 data from the Texas Real Estate Research Center.
To close the projected long-term gap, county staff recommended a set of measures for commissioners to consider, including: negotiating changes to the county health plan (a target 10% cost reduction was mentioned), capping program-change requests at $5 million for fiscal year 2026, reviewing overtime and FLSA (Fair Labor Standards Act) payments—particularly at the Sheriff’s Office where overtime totals about $22 million annually—and reassessing ARPA-funded programs that have been moved into the General Fund. Gaethon said that without recurring cuts, the Budget Office will need to identify savings because one-time balances will not cover ongoing costs.
On debt, the forecast assumed no new issuances until fiscal 2027 and showed the county’s debt-service fund remaining healthy under those assumptions. Commissioners discussed using growth tools such as public improvement districts and denser housing development to expand the tax base and urged staff to continue to refine assumptions, especially around health insurance and the county’s exposure if state or federal grants are reduced.
No formal vote was required for the presentation; staff were directed to carry the forecast assumptions into the upcoming budget process and to return with details on specific savings options and program-change requests.
