Bexar County’s top budget and finance experts say the county is headed for some tough financial straits, thanks to slowed growth that hasn’t ticked back up in several years now.
Earlier this week county staff received its first report on 2026 property valuations from the Bexar Central Appraisal District — offering an early look at the revenue the county can expect to collect from property taxes.
Afterwards County Manager David Smith said he asked the budget department to quickly turn around a presentation for the county’s elected leaders so there would be no surprises about the tough budget cycle to come.
“Our year-over-year growth in property assessed values, including new construction, has declined in a period of a few years — from double-digit growth, to barely any growth at all,” Smith told the commissioners Tuesday.
“The last time we [saw] numbers this low … it was right after the financial crash of 2008,” he added. “We are looking at that level of property tax decline / no growth, which is highly unusual.”
During the bullish housing markets, Bexar County’s total property values rose by an average of 16% in 2023 and 28% in 2022, before cooling off to about 2.4% in 2024 and 2.1% in 2025.
Earlier this month the appraisal district reported that Bexar County’s overall property values were in line with the more recent years, rising by about 2.5% in 2026.
But the growth wasn’t felt equally throughout the county, with many home values actually declining in value as businesses and multi-family properties went up.
At the same time, new development that’s helped make up for a decline in existing property values in recent years seems to be slowing.
“Data, both locally and nationally, suggest a pretty dramatic slowdown in new housing construction sales,” Smith said.
As it stands, existing properties in Bexar County were valued at $4.8 billion less than the previous year, according to the county’s presentation.
The county is adding $6.8 billion in new growth to the tax rolls in 2026 — putting projected revenue in the positive for now — but still must take into account revenue lost from property owners who successfully challenge their valuations.
Once the valuations are finalized in July, the county projects its property tax revenue will actually be down 1.7% from the previous year.
“Essentially, you’re looking at a decline in overall assessed values, which I would say would be greater than what we saw after the housing crash,” Smith said.
In recent years, slowed growth has hit the city of San Antonio much harder than Bexar County, because so much of the new development was happening outside the urban core.
City leaders have already been looking at raising taxes and fees this year to bridge the gap, and will receive their own five-year financial forecast next week.
Budget cuts to come
On Tuesday, Smith warned county leaders to buckle up for tough spending decisions on the horizon.
While the city has more varied revenue streams, about 80% of the county’s general fund comes from property taxes.
“There’s very little you can do, other than raise taxes, to affect the revenue side,” Smith said. “We don’t assume you’re increasing the taxes in this forecast. What you do control, to some degree, is the cost.”
Last year, county staff projected that without major spending adjustments, Bexar County’s general fund needs would exceed its revenue by $28 million by fiscal year 2028.
On Tuesday, that projection had been adjusted to $148 million by fiscal year 2028, as the county lowered the amount it expects to collect in property tax revenue.
The previous budget forecast assumed growth of about 2.7% to 3.4% over the next five years, said Budget and Finance Director Tanya Gaitan.
But after receiving new information from the appraisal district, those forecasts have been adjusted to -1.7% growth projected in fiscal year 2027, flat revenue in fiscal year 2028, then 1% in fiscal year 2029.
Smith said that if this year’s projection is correct, the -1.7% revenue would be worse than the county has seen in decades.
“If that ends up happening, it will exceed what we actually experienced in our worst year after the housing crash by quite a bit,” he said. “This would be the worst year for property tax revenue that we’ve seen — well, certainly since I’ve seen — and that’s going on 30 budgets now.”
After the 2008 financial crisis, Smith said the county avoided laying off staff and cutting programs by putting off cost-of-living adjustments for county employees, not back-filling vacant positions, adjusting employee health insurance plans, and pausing on new capital projects.
“But if these forecast numbers hold without any other mitigation, I can’t predict what menu of actions would be needed,” he said.
The county’s fiscal year starts in October, and the commissioners approve a budget in September.
It will be County Judge Peter Sakai’s last budget, before a new county judge is elected in November.
“We just wanted to get in front of you and the rest of the county will let you know right now — this will not be ‘steady as she goes’ kind of budget,” Smith said.
