Stagnant property values, slow residential property sales, new tax exceptions and funding changes have Alamo Colleges District officials preparing to address an imminent $28 million budget shortfall for fiscal year 2027.
“We have never seen anything like this,” said Priscilla Camacho, Alamo Colleges District chief legislative, industry and external relations officer, when addressing the board of trustees in late May.
Camacho was joined by Shayne West, associate vice chancellor for financial planning and auxiliary services, to address the budget outlook ahead of a meeting on June 13, where trustees will be presented options to address the deficit.
Property tax fuels nearly half of the district budget, but with a property tax rate unchanged since 2013 and a renewed directive by Gov. Greg Abbott for Texas colleges and universities not to increase tuition, the district said it is weighing fewer options.
The Alamo Colleges District umbrella includes five colleges — San Antonio College, St. Philip’s College, Palo Alto College, Northwest Vista College and Northeast Lakeview College — as well as five training and continuing education facilities in the region.
Alamo Colleges officials have not raised tuition on their existing programs since 2019.
“There are pressures in all of our revenues,” West said. “Our state funding, as you heard, is not keeping pace with our performance, but our performance outcomes continue to grow.”
The unprecedented budget territory arose from multiple impacts to Alamo Colleges’ revenue sources at once. But the most significant moment came after Bexar County’s first look at 2026 property valuations at the end of April, when county and district staff got a sobering outlook on what they can actually expect to collect from taxpayers this year.
County officials likened this decline in property values to the aftermath of the 2008 financial crash, deeming the moment “highly unusual.”
Property tax revenue for Alamo Colleges District and state appropriations alone are falling short by more than $17 million from what the district had previously predicted for fiscal year 2027. This due to changes in tax exemptions and a recalculation of additional funding the colleges were receiving for serving some at-risk populations.
State appropriations are expected to grow by about $3 million from fiscal year 2026 to 2027. This equates to about half a percentage point in added state revenue, while the district’s enrollment is slated to increase by nearly 7%.
Enrollment across the five colleges and training centers has steadily increased over the years, reaching more than 85,000 students last fall. But this growth is also outpacing the district’s own projections, which now place the colleges at 100,000 students by 2028 — not by 2030 as previously expected.
While tax revenue issued the biggest blow, the district’s overall revenue has also not kept pace with growth, West said, and overall enrollment is outpacing revenue by more than three times.
“We need revenue to sustain and maintain our growth and not just to provide quality instruction, but to provide all other support services that our students rely on,” West said.
These services include programs like Alamo Promise, which by 2025 had served more than 30,000 local high school students transitioning to any of the five Alamo Colleges tuition-free. Last fiscal year the colleges earmarked $5 million for Alamo Promise, but next year the number of students expected to enroll will bring this investment up to $7.5 million.
“We are a $1 billion organization,” said Alamo College Chancellor Mike Flores during the meeting. “We are looking at sustainable growth, but ensuring that we continue with those flagship investments that can provide a high-quality undergraduate experience.”
Te board will be presented with options to address this shortfall on June 13, the same day the district is holding a runoff election to fill one of its nine elected seats. One of the main issues in the District 9 runoff race between accountant Robert Garcia and longtime educator Carolyn DeLecour has been how the candidates plan to approach dealing with tough budget decisions.
Some of the early options for the board to consider are a district-wide review and renegotiation of contracts, as well as an adjustment of staffing and services. The special meeting will be open to the public.
Revenue pressures
Since fiscal year 2013, Alamo Colleges District set its tax rate at about .15 cents per $100 of property value. In 2024, board of trustees also approved added homestead exemptions and increased exemptions for disabled residents and property owners over age 65.
“We have been extremely good stewards of our property tax rate,” West said.
Overall, property tax fuels about 47% of the districts’ revenue, with state appropriations and tuition making up about a quarter each.
In recent legislative sessions several bills awarded tax relief for property owners, including Senate Bill 2 and House Bill 9, which increased homestead exemptions and awarded new exemptions to business property.
Tax exemptions for both business and residential property taxes have affected more than 50,000 properties in Bexar County, Camacho said, totaling more than $10 billion in new exceptions.
“We did not know the full extent of some of the exemptions that were put into place after the last legislative session and when we got the rolls from [Bexar County Appraisal District] we saw a dramatic hit,” Camacho said.
Across Bexar County, existing taxable values for Alamo Colleges District had grown by 13% in 2023, but this year they’re down by about 2%, or $7.3 billion. This, coupled with added state exemptions, contributed to the expected 4.5% loss, or about $11.7 billion, of the district’s overall taxable values.
The new college finance formula for the upcoming fiscal year is also changing, Camacho warned the board.
The Texas Higher Education Coordinating Board proposed changes that reduce the weight given to certain populations served by colleges to calculate the level of extra funding earmarked for colleges that serve a large number of these populations.
Under House Bill 8, which passed in 2023 and tied state funding to performance and outcomes, Alamo Colleges positioned itself as the top earner across Texas under the state’s revised funding model for community colleges, which was revised to also incentivize transfers to four-year institutions.
In 2026, the district received more than $92 million in state funding for the fiscal year, a year-over-year difference of more than $4.6 million, according to Texas Higher Education Coordinating Board data.
Recent changes to the community college funding formula decreased the weight given to adult and disadvantaged learners, and placed caps on the fundable credentials per students. This contributed to a decrease of $3.7 million in what the district expected to receive in state appropriations for the upcoming fiscal year.
“This has been a challenge, as you know, because while we always pride ourselves in having affordable tuition, and while we still have affordable tuition, the reality is that there is an increased cost in delivery, especially for those programs that are in high demand occupations,” Camacho said.
Early voting in the District 9 runoff election is underway and goes through June 9. Polls will also be open on June 13 from 7 a.m. to 7 p.m.
To get live results, sign up for text messages from the San Antonio Report at this link or text “VOTE” to (210) 796-6853.
The San Antonio Report partners with Open Campus on higher education coverage.
