Austin city council signals a tax rate election is coming, but for how much?
Because of a 2019 state law, taxing entities cannot raise the property tax rate more than 3.5% from the year prior without triggering a tax rate election (TRE).
That's where the city manager's base budget sits right now — at the 3.5% rate allowed without triggering a TRE — which would still mean a total monthly increase of $18.18 per month or $218.16 annually for the 'average' ratepayer and taxpayer.
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Because of significant budget challenges this year, including a dip in sales tax revenue and cuts at the federal level, some Austin city council members and the mayor are considering a tax rate election that would raise your property taxes more than that proposed base budget.
Now that a tax rate election has been recommended to the full council, as is part of the city's new tax rate election policy, here's what each council member is proposing be in that ask of voters:
Proposal A: $485.36 more for average rate payer and homeowner
Mayor Pro Tem Vanessa Fuentes (D2) and Austin City Council Members Jose Velásquez (D3), Chito Vela (D4) and Ryan Alter (D5) are proposing a 6.75 cent tax increase, the most costly proposal, which they say will do the following, in-part:
Fund the city's plan to combat homelessness 'by including 'upstream' elements that keep people housed or quickly get them back into housing'
Expand the city's affordable housing programs
Take a 'significant step' toward better maintaining parks
You can read the full proposal here.
That 6.75 cent tax increase, if approved by voters, would tack roughly $267.20 onto the city manager's proposed base budget. That means in total, the average homeowner and rate payer would spend $485.36 more next year.
Proposal B: $445.02 more
Austin City Council Members Krista Laine (D6), Mike Siegel (D7), Paige Ellis (D8) and Zo Qadri (D9) are proposing a 5.75 cent tax increase scenario that 'responds to demands to protect public health programs, improve emergency response, provide shelter and support for people experiencing homelessness, and invest in climate resilience,' the group wrote.
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'We have also prioritized sidewalks and parks maintenance, access to pools, restoring funding to the Office of Police Oversight and the Housing Trust Fund, library resources and reentry workforce development and much more. Finally, like our colleagues, we are prioritizing caring for our civilian employees and ensuring future cost of living increases,' they continued.
That proposal — at the 5.75 cent tax increase — would cost the average homeowner $226.86 on top of the city manager's base budget, according to a scenario chart provided by city of Austin staff.
In total, and if approved by voters, that proposal would ultimately cost the average homeowner and ratepayer $445.02 more next year.
You can find that proposal — and what would be funded by it — laid out here.
Mayor Kirk Watson proposal: $356.70 more
Watson is proposing a less significant rate increase, but still advocating for a tax rate election. The mayor is proposing a 3.5 cent tax increase, which would raise the average homeowners property taxes by $138.54 over the city manager's base proposal.
In total, that proposal would result in $356.70 more for the average ratepayer and homeowner.
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The mayor's additions would cover the Homeless Strategy Office's funding plan, adds money for park maintenance and wildfire mitigation. You can find Watson's proposal here.
'It doesn't do all that I would like to see us be able to do in terms of funding services, and it also adds to the tax burden. But my hope is it offers voters a balanced way to preserve some important services while minimizing the damage on our affordability efforts,' Watson wrote.
No tax rate election
Austin City Council Member Marc Duchen (D10) is so far the only member of the body who has indicated he is against a tax rate election outright — citing concerns about affordability. But he also indicated he would be willing to compromise on a less significant TRE.
'If there was an interest on the dais, I would explore a compromise and support a modest one or two cent TRE that includes priorities that I believe we can all agree on, including public safety, parks, wildfire mitigation, and preserving a healthy reserve fund. I welcome any collaboration on this. However, what I heard…was 'go big or go home'. And when presented with a 5+ cent ($200+) TRE I fear Austin taxpayers will tell us to 'go home,'' Duchen said.
Duchen encouraged the city to look at necessary cuts. You can read more from Duchen on his proposed plan here.
No signal yet from Council Member Natasha Harper Madison
Harper Madison hasn't indicated where she may fall on a tax rate election, but her staff did highlight three amendments the council member is leading on, including two amendments that would provide one-time funding for the Safe Alliance 'which has lost millions of dollars' in federal and state funding.
How much could the city of Austin raise your property tax bill this year?
'One is for $250,000 in unmet needs at the City of Austin's Family Violence Shelter to be operated by The SAFE Alliance…The other is for unmet needs at The SAFE Alliance for the operation of safety net housing for youth aging out of foster care with no alternative living arrangements,' Sharon Mays, Harper Madison's chief of staff said.
The third amendment is for utility relief for nonprofits. Mays said that amendment adds $250,000 in one-time funding for Austin Water and $250,000 for Austin Energy 'to subsidize or reimburse the utility costs of nonprofit shelters and housing providers.'
Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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