Austin council weighs amendments as staff warn long‑term budget outlook is sensitive to sales tax shifts

Austin City Council met Nov. 19 in a special session to continue deliberations on the city manager's proposed amended fiscal 2025-26 budget, confronting a wide range in outer‑year deficit estimates and debating how to protect social services while addressing a structural shortfall.

Mayor Kirk Watson called the meeting to order at 10 a.m. and framed the day as an opportunity for staff to clarify numbers, for members to lay out proposed amendments and for the public to comment ahead of a scheduled budget vote tomorrow. "If council gets the needed number of votes before any of the remaining meetings, we will be canceling the remaining meetings," Watson said, emphasizing the schedule and the need for transparency on next steps.

The budget office and the city manager told the council the single largest source of volatility in the multi‑year forecast is sales tax receipts. "Every 1% shift is about $3,750,000 to the city," Carrie Lang, director of budget and organizational excellence, said, noting that small changes compound across the forecast horizon and drive large swings in projected deficits. Staff said assumptions about new construction property tax, sales tax growth and programmatic commitments explain the range of FY29 deficit estimates presented over the past year.

City Manager T.C. Broadnax outlined four optimization efforts intended to reduce long‑term costs: an IT consolidation and application rationalization, internal service fund optimization, a review of social service funding, and department‑by‑department performance benchmarking. Broadnax said the city has already posted a solicitation for consultant support to augment internal discovery and will work with the auditor's office on assessments.

On policy, Mayor Watson presented a posted amendment directing the development of a citywide approach to social service contracts and grants that would centralize procurement, set deliverables and require outcome measurement. The mayor said the motion would also direct the manager to report back on cost savings identified by the review. Mayor Pro Tem Vanessa Fuentes and others pressed for an explicit reporting framework and committee engagement to ensure council oversight.

Council members also previewed several individual amendments they will move during the amendment phase, including a proportional cut to council office budgets (Council Member Ryan Alter), restoring funding for child‑abuse evidence and witness advocacy outside Travis County and $100,000 for overnight emergency veterinary stabilization (Council Member Lane), and items to support EMS staffing and wildfire mitigation from other members.

The meeting included an extended public comment period. Speakers represented social‑service providers, unions, homelessness advocates, neighborhood groups and individual residents. Testimony repeatedly urged council to preserve eviction prevention and tenant stabilization programs, maintain or locate funding to support the expanded mobile crisis team (MCOT) and EMS overtime staffing, and to reconsider the police budget and contract given current fiscal constraints. "This budget is a moral decision," a public commenter said during remote testimony.

Staff flagged a number of funding constraints: several revenue streams are legally or programmatically restricted (for example, many density bonus fee‑in‑lieu buckets are governed by ordinance and targeted to specific capital projects or geographies), and certain bond or TRE‑designated monies cannot be repurposed for general budget gaps. The manager and staff said they will return with more detail about possible reallocation options, and the council was reminded that passage on multiple readings in one day requires at least seven votes.

Next steps: Council will reconvene at 10 a.m. on Nov. 20 for a regularly scheduled meeting where the manager's proposed amended budget and council amendments will be taken up; if votes do not reach the thresholds required for passage on all required readings, the body is posted for additional meeting dates this week.