City of Austin Releases Proposed FY26 Budget: What Businesses Should Know

On Friday, July 11, the City of Austin released its proposed Fiscal Year 2025–2026 (FY26) operating budget. Totaling $6.3 billion, the proposal—presented by City Manager T.C. Broadnax—outlines how Austin plans to maintain essential services while managing economic pressures, including revenue limitations and rising operational costs.

The City’s Budget Core Themes: People, Place, and Partnerships

The budget framework is organized around three guiding priorities:

• People – Investing in City staff and community engagement
• Place – Supporting a livable, affordable, and resilient Austin
• Partnerships – Strengthening collaboration across local, regional, and global sectors

While facing an earlier projected General Fund shortfall of $33.4 million, the proposed budget maintains core services and includes targeted investments in key areas such as homelessness response, parks and recreation, emergency preparedness, and the creation of a new department focused on arts, culture, music, and entertainment.

Proposed Investments Include:

• $8 million for emergency shelter operations at the Marshalling Yard
• $4 million for emergency rental assistance
• $375,000 for youth athletic field maintenance
• $2.9 billion in infrastructure improvements (airport, wastewater, convention center)

Property Taxes & Ratepayer Impact

The proposed property tax rate is $0.5276 per $100 of valuation. For the average homeowner, this represents an estimated $12.90 monthly increase on their City property tax bill. When combined with utility and service fee adjustments, the typical Austin resident could expect to pay approximately $22.35 more per month, or $268.23 annually.

While this proposed rate remains within the 3.5% voter-approval threshold established by the state, City Council is actively considering whether to pursue a Tax Rate Election (TRE) in November to authorize a higher rate.

A new Council-adopted TRE policy outlines how and when such proposals are considered. The coming weeks will be critical for shaping the final approach.

Why It Matters

With affordability remaining a central concern for Austin’s business community, we encourage Chamber members to stay informed and engaged as City leaders weigh next steps. As a community, it's essential that limited resources are directed where they are most urgently needed.

What’s Next: Timeline for Input & Deliberation

Several opportunities remain for public input and Council discussion over the next month:

• July 22 – Audit & Finance Committee reviews potential TRE scenarios
• July 23 & 29, August 5 & 7 – Council budget work sessions
• July 31 – Public hearing on proposed maximum tax rate
• August 13–15 – Council budget adoption hearings

How the Chamber Is Engaged

We will continue monitoring the budget process and communicating with City leaders to ensure Austin’s economic vitality is protected—balancing necessary investments with long-term sustainability. We are especially focused on how this budget impacts affordability, the reliability of basic services, and the structure of utility rates and transfers.

Several members of our Board are actively engaged in the process and will be keeping a close eye on the discussions as they unfold. We encourage our members to connect with their Council Member, the Mayor, or City staff to share your perspective—especially on ensuring funding is directed to foundational services that impact quality of life and economic competitiveness.

Members can also be engaged by attending City Council Budget Town Halls happening throughout July and August (listed below as of 7/17, 11:30 AM CST). These events are a great opportunity to ensure the business community’s voice is heard directly by elected officials.

Have questions? Contact our team at tnkollo@austinchamber.com.