Facing a major budget deficit and a struggling economy, the San Antonio City Council approved a 3.9% property tax increase Thursday — the city’s first in more than three decades.
The 7-4 vote largely split members along socioeconomic lines, with wealthier Northside districts opposing the 3.9% increase and members from less affluent districts voting in favor.
Initially, nearly all council members balked at raising taxes when inflation is already putting so many residents in a financial strain.
But weeks of reviewing alternate budget scenarios led a majority to believe that more spending reductions — on top of the $90 million worth of cuts already planned over the next two years — would hit most vulnerable residents too hard.
“[In] the conversations I’ve had [with residents] … it’s actually been the most humble among us who have been the first to say, ‘yes,'” said Councilman Edward Mungia (D4), whose Southside district is among the poorest.
“…That’s a stark contrast with those who have had the most, I’ve heard from people today who own more than one parcel of property, saying that they can’t afford that.”
This year slowed economic growth left many Texas cities and counties in a similar boat, looking high and low for cuts to balance their budgets.
In San Antonio, that meant a public reckoning over some big recent economic development investments, including whether to help fund a new Spurs arena, led by Mayor Gina Ortiz Jones.
A deeply divided council still never found consensus on a different approach, however, and City Manager Erik Walsh told them this week that they’d run out of time.
The city is legally obligated to pass a balanced budget every year, and voting down the rate hike would delegate an additional $75 million worth of cuts to city staff.
Councilwoman Ivalis Meza Gonzalez (D8), who was considered a swing vote on the tax hike, said that was a bridge too far, and ultimately split with other Northside members to approved the increase.
“These right-sizing initiatives do not cut to the bone … [but] if the property tax increase were to fail, it would fall to the city manager’s office,” said Meza Gonzalez.
“I believe that amounts to an abdication of my responsibilities. … I really want my colleagues to recognize that decision.”
The tax increase means the average San Antonio home, valued at $234,000 with a homestead exemption, would pay an additional $35.43 per year.
But a city analysis of the breakdown by council district highlights the different equation the members faced — the increase amounts to less than $2.50 per year in District 6, or more than $100 per year in District 1.
Jones joined Councilmembers Marc Whyte (D10), Misty Spears (9) and Marina Alderete Gavito (D7) in voting against the rate hike, as well as the overall city budget.
After weeks of work sessions, Jones had thrown colleagues a curveball on the day before the vote, calling for across-the-board cuts to avoid a rate increase.
Progressive colleagues objected to a plan they said could reverse years of so-called equity budgeting, while some conservatives thought her support could put their goals within reach.
They only needed five votes to buck the tax increase, and teamed up with Jones on Thursday to try to buy more time before the budget vote.
Their plan was soundly rejected, as exasperated members lamented an already prolonged debate over ideas without broad support.
Jones said Thursday that she thought they quit too soon.
“We owe it to our neighbors to make the tough cuts, and unfortunately, this budget shows we punted,” Jones said. “Our neighbors are left wondering if this tax increase was necessary, or whether we can definitively say it’s the lowest it has to be. I think the answer to both of those questions is no.”
A summary of Thursday’s votes on the budget, tax rate and amendments can be found here.
‘I’m giving them the truth’
To close a $158 million deficit over two years, city staff said San Antonio would need a combination of spending cuts, new revenue and a tax increase each fiscal year.
In early August staff said it could accomplish the first leg of that equation through $90 million worth of cuts that most residents wouldn’t feel, like not back-filling vacant positions and reducing inefficiencies.
If the council wanted to forgo the tax rate hike, however, their recommendations ventured into territory that many considered too disruptive: nixing repair programs that keep seniors in their home, summer youth programming for disadvantaged youth and significant library services — to name a few.
“We need our senior centers, our community centers, libraries, and parks,” said Jalen McKee-Rodriguez (D2). “[My residents] we rely on the programming they provide because we haven’t seen the private investment in affordable family-friendly activities that exist elsewhere.”
But skeptics of the tax increase have accused Walsh and his staff of cherry-picking items that would pit members against one another, and weren’t actually likely to be cut.
This week Walsh said about a third of the cuts he initially proposed in an “alternate scenario” were indeed unlikely to happen, including some of the ones members feared.
“We had a two-day turnaround to provide that list …. we didn’t go back through the entire $4 billion budget to figure out how we cut $75 million, nor did I think we would potentially be in this position,” Walsh told reporters Wednesday.
He said his staff was doing its best to give the council sound financial advice, not pressure them into going along with their proposal.
“It’s not like the good old days … our job is a balanced budget — no ifs, ands or buts,” Walsh said. “I’m not really concerned about people thinking that I’m scaring them. I’m giving them the truth.”
City fees go up this October
In addition to spending cuts, San Antonio plans to bolster its revenue with tens of millions of dollars worth of increased fees on everything from ambulance rides to lost library books.
These take effect at the beginning of the new fiscal year, which starts Oct. 1
Some council members say the changes will also hit poor residents harder than wealthier ones, but Walsh said the city is absorbing rapidly rising service costs when it doesn’t adjust them to keep up.
“Recovering the cost of service is allowed under state law,” Walsh said. “We can’t make a profit on that stuff, and so [we’re] updating that cost of service, [which] go up all the time, whether they’re labor or equipment.”
This week a handful of additional fees were thrown in at the last minute to cover council’s budget amendments, which can’t legally be considered without a way to balance them in the budget.
In order to restore funding for a gastronomy program, a cultural historian, employee scholarships and other budget amendments, the city is ramping up fees on booted vehicles, parking violations and HAZMAT fees for gas stations, among a number of other changes.
In the final budget discussions this week, council members also restored funding to their personal capital budgets, which they can spend without input from colleagues on projects of their choosing.
Some members have been letting those accounts add up from year to year, and voted to give themselves another $1 million each this coming year.
“That comes out of the capacity for [our 2027 bond],” Walsh said Wednesday. “Two years running, we proposed reducing it, and it likely is going to be two years running that the council votes to restore it.”
Missing law enforcement
Notably absent from this year’s budget is the additional police patrol officers that a 2023 city study said San Antonio badly needs to keep up with population growth.
The 2026-2027 budget does move some unfilled park patrol positions over to the San Antonio Police Department, and it increases the department’s budget by 7% to cover raises and other benefits in SAPD’s new $102 million union contract.
To the council’s most conservative members, however, beefing up the police force was priority No. 1.
“I just don’t understand why we don’t have more police officers and firefighters in this trial budget — that’s the priority on both the council priority [surveys] and community surveys,” Spears said at the Aug. 13 budget presentation.
Throughout the amendment process, Spears sought to lure progressive colleagues on board with one new SAFFE officer per council district, which would attend neighborhood meetings and focus on quality of life issues instead of regular patrol duties.
“We thought that would be something that would be more inclusive, something that you’d be more agreeable to as a body,” Spears said. “I really wanted patrol.”
But even that idea didn’t gain enough support from council members wary of the growing a police budget that Texas law doesn’t allow cities to ever reduce.
“I struggle a little bit with the 10 additional SAFFE officers, as that is another recurring expense,” McKee-Rodriguez said at Wednesday’s work session. “I would have a better outlook if we instead added back the filled library positions and the filled maternal health metro health positions.”
On Thursday, Whyte and Spears tried to amend the budget from the floor to add officers just for a northside police substation — drawing an outcry from fellow council members who voted it down. There was also talk of trying to fund the officers from their council office budgets, but that idea also didn’t move forward.
Other public safety entities also got funding bumps despite the tough budget year, including Animal Care Services and the San Antonio Fire Department.
A council divided
Thursday’s meeting concluded a grueling budget season, after which Jones vented frustration that more of her ideas hadn’t gained traction.
“Raising people’s property taxes during this affordability crisis was my last resort, which is why I waited till the very end, to have the staff present all the options, look at these pots of money that haven’t really been looked at previously, and then of course understand my colleagues’ appetite to change things,” Jones said.
“I was a little bit surprised about the unwillingness to do some of that, in light of the consequences.”
But even on an overwhelmingly progressive council, many members still consider economic development among their most critical investments, and resented Jones’ efforts to pull money in other directions.
They shut down her efforts to move money from the Ready to Work job training program, voted against a city election on the Spurs arena funding, and some even walked off the dais during a meeting Jones pushed for to reconsider commitments to big zoo and botanical garden projects.
Councilwoman Phyllis Viagran (D3), who found herself at the center of that heated disagreement, said Thursday that the city needs to give it longer for its existing projects to play out.
“The jobs will come. Economic development is the way out. But we have to begin to talk to each other,” Virgran said.
Whyte, one of the council’s most conservative members, also chalked up many of the council’s recent fights to that fundamental disagreement.
“If we are going to lift everybody up, we need more jobs and better-paying jobs here in our city,” Whyte said.
“The difference in approaches between some of us here today is the belief [in] some of these programs where you give directly or you see immediate impact now — a lot of which I believe are band-aids — versus a focus on a longer-term approach.”
As major decisions came down to the wire, Mungia, whose district had much at stake in the spending cuts, said he was also disappointed the council hadn’t been more strategic.
Two years ago, voters gave the council a longer runway to govern before having to think about their reelection races — yet an eleventh-hour fight over the tax rate suggested that for many, politics were still at play.
“We haven’t lived up to our four-year term that voters gifted us to plan, and to educate, and to think about our long-term future over easy short-term decisions,” Mungia said.
“That’s exactly why residents did that … to make the tough decisions for the long-term future of the city, and we just have not done that.”
