Austin Mayor Calls for No-Tax-Increase Budget Forecast

With Austin’s next budget cycle kicking off in April, Mayor Kirk Watson is asking city staff to run the numbers in a different way: assume no property tax increase.

The request — endorsed by four council members — breaks from recent practice, where budget forecasts routinely baked in the 3.5% maximum allowable tax hike.

It comes as Watson continues to lean into a broader affordability message — and just months after voters overwhelmingly rejected a proposal to raise property taxes by more than 20%. The vote suggested even Austin’s typically progressive electorate has limits when it comes to higher taxes.

“Austin’s affordability remains a priority for me,” Watson wrote in his latest newsletter. “Affordability is impacted by taxes.”

It’s unclear if city leaders will seek to raise property taxes again this year. But Watson said building a forecast without new tax revenue would make the tradeoffs clearer — especially which services could face cuts.

“There are a number of reasons for doing this,” he wrote, “including the basic recognition that people all over Austin are struggling in the current economy”.

State law caps annual property tax increases at 3.5% for cities and other local taxing entities, requiring voter approval for hikes over that amount. After last year’s failed ballot measure, the city defaulted back to that rate – about $155 more for the median homeowner with a property worth about $500,000.

Watson said starting with a no-increase scenario should also reduce confusion. Last year, he noted, many residents weren’t sure whether taxes ultimately went up.

City staff are set to release the five-year forecast April 15, followed by a full council briefing at an April 21 work session.