Austin Mayor Kirk Watson on budget deficit and Trump cuts

Axios

24-04-2025

Austin Mayor Kirk Watson has fulfilled many campaign pledges, but he now faces major uncertainties, including a ballooning budget deficit and an unpredictable federal partner in the Trump administration.
Why it matters: Grand plans — such as tree-laden bridges over a remade Interstate 35 and major expansions of the airport — could be in jeopardy.
State of play: Watson, who previously served as mayor in the 1990s and then as a Democrat in the Texas Senate, was reelected to a second consecutive term as mayor last fall.
During his second stint in City Hall, he has made government operate more efficiently, hammered out public safety labor contracts and marshaled a major easing of city home construction rules.
Yes, but: In early April, the Trump administration canceled a $50 million grant meant to reduce flooding risks for Austinites.
That came on the heels of a cancellation of money for electric vehicle chargers.
Plus: Less-than-expected sales tax revenue has driven a projected $33 million budget deficit that city officials will have to close, either by slashing city services or by raising more money, either through fees or taxes.
A 2019 state law caps property tax revenue and the Travis Central Appraisal District has reported that home values are down.
The big picture: Under Watson's watch, Austin appears to be functioning as well as ever.
The city's Development Services Department, long known for causing headaches among developers and homeowners, has cut its initial review time from more than 100 days to 33, per city data.
911 calls are getting picked up faster — from 77% within 15 seconds a few years ago to now at least 90% (though emergency response times in a city clogged with construction remain stubbornly hard to cut).
Even City Council meetings, once notoriously long (9.5 hours, on average, a decade ago), are moving relatively swiftly (typically under 6 hours in the second Watson administration).
Zoom out: The city has invested in housing for people exiting homelessness, and animosity between police and City Hall has ebbed, even as the relationship remains chary.
We sat down with Watson to talk about the state of play. This interview is edited for brevity and clarity.
What, if anything, should Austinites expect about what might happen with city services or fees as a consequence of this deficit?
"We're in that point in the movie where everybody that's in the raft is hearing a loud noise, and they act like, 'Is there something coming up now?' and the people watching the movie, we all know there's a waterfall coming. We anticipated that this is where we're going to be.
It would be premature to start speculating about what might happen with this or what might happen with that. We'll be looking at everything."
How concerned are you about federal commitments, for the city's big public transportation project, for the airport expansion, for I-35 efforts?
"There's a whole lot on the table that can create uncertainty and concern. "
"The way we were thinking about it is if the (grant) was signed, we're assuming it's still coming through ... but that's no longer the case."
Does the deficit and the Trump administration somewhat capriciously cutting big blocks of money jeopardize some of your efficiency agenda?
"It is now just the context in which we govern."
We're getting to the home stretch in the legislative session. What's out there that gives you most concern?
"On Project Connect (the city's multibillion dollar light rail and bus plan), I remain concerned about the Legislature stepping in the way (of) the voters will on that.
I also am concerned about (the punitive effect of) bills that mandate certain actions on the part of a city that — for example, encampment cleanups — if the cities don't do things a certain way, they'll stop sales tax revenue. Those sorts of bills don't take into account the practical impact ... that (if) you take away sales tax, that can have an impact on public safety" which makes up much of the city budget."
You must feel like you have a little more control with what's going on at the Capitol than what's going on in Washington.
"I certainly feel more comfortable because I know more of the people I'm dealing with at the Capitol, I have more relationships. I have a far better ability to just walk up the street and talk to somebody or get somebody on the phone. And I've been very pleased this session with the openness of members to talk to me about bills, and even bills that we don't like.
Whereas with the $50 million grant, it just disappeared. There's nobody who chats with you beforehand."
Individuals and institutions are being tested in this political climate, whether it's a university or a law firm. Is that something the city of Austin is prepared for?
"I don't think anybody has figured out who's going to be tested and how they're going to be tested. My rules are, one, focus on what I can control — make sure local government is stable as we focus on the fundamentals of governance. The second is, do no harm."
What's an example of what you mean about that?
" Immigration. We have almost no power in that, except the power to make it worse. I'm not going to take actions that ... end up doing more harm to the very people we say we're trying to protect."
What are you enjoying most about your job and what right now is giving you the most heartburn?
"The thing I enjoy the most about the job is that you can have such an immediate impact. And the part that frustrates me is probably the flip side of that coin, that sometimes it moves more slowly than I would like to get that immediate impact."