Maybe a 5-cent tax increase was always the number the City Council was going to land on. At any rate, that’s the number that Council members seemed ready to approve on Wednesday, as the Chronicle went to press and Council worked to finalize passage of the 2025-26 city budget.
Two weeks ago, the CMs voted to hold a November tax rate election (TRE) to ask voters to sign off on higher taxes, after federal funding cuts led to a $33 million city budget deficit. After the vote, the question became how much to ask Austinites to approve. Council could have asked for increases of anywhere from 1 to 8 cents on each $100 of property value. Each extra cent in tax would add approximately $40 to the average homeowner’s yearly tax bill and bring about $20 million more to the city’s general revenue fund.
Austinites urged Council to choose a figure near the top of the 1-8 cent range at a series of meetings after the TRE vote. Four separate proposals emerged. The lowest, from CM Marc Duchen, called for a 2-cent TRE, focused on funding the Austin Fire Department, wildfire mitigation, and parks. Mayor Kirk Watson proposed a 3.5-cent TRE that prioritized funding the comprehensive homelessness plan created by the city’s Homeless Strategy Office, which is widely supported in the community and on Council.
A third proposal from a Council subquorum of CMs Zo Qadri, Mike Siegel, Paige Ellis, and Krista Laine advocated a 5.75-cent TRE to fund the Homeless Strategy Office plan, sidewalks, parks, libraries, a cost-of-living raise for city employees, and a lot more. A fourth, from the Council subquorum of Ryan Alter, Vanessa Fuentes, José Velasquez, and Chito Vela, funded most of these items as well as programs related to family stabilization, violence intervention, immigration services, climate resilience, and the animal shelter.
“We’ve developed a 5 penny proposal that reflects … the urgency of this moment.” – Council members in a public statement
In announcing his 3.5-cent proposal at the beginning of August, Watson had warned the CMs that approving a higher TRE could threaten its passage in November, writing, “We need to take care … to reduce the risk of losing an election.” By late last week, that concern seemed to be spreading through the Council. Qadri, Siegel, Ellis, and Laine sent out an amended proposal on Monday calling for a 5-cent TRE.
“After consulting with a broad array of stakeholders, and with the goal of building a proposal that can win a strong supermajority of Council support, we’ve developed a 5 penny proposal that reflects both the urgency of this moment to invest in our city’s future and our shared responsibility to be careful stewards of public funds,” the CMs wrote on the Council message board. They linked to a line-item spreadsheet of the proposal.
The new 5-cent proposal prioritizes funding for the Homeless Strategy Office plan and housing affordability programs. It provides money for libraries, sidewalks, and city employee raises while eliminating most pool fees. It restores public health funding cut by the federal government. And it prioritizes a wide array of specific public health initiatives related to community violence, wildfire mitigation, and mental health first responders, among others.
As the Council meeting got underway Wednesday morning, Watson noted that 423 people had signed up to speak before the budget was to be taken up. That meant the final vote wasn’t likely to happen until the evening or perhaps even the next day. The Chronicle will report on which priorities make it into the final budget in next week’s issue.
This article appears in August 15 • 2025.
