Austin Officials Outline Budget Shifts After Voter Rejection of Proposition Q

Austin City Council approved a $6.3 billion Fiscal Year 2025-2026 budget on an 11-0 vote after voters rejected Proposition Q. The measure cut $38 million from social service contracts and added $3.6 million to the Homeless Strategy Office.

The vote came after months of debate over how to balance revenue shortfalls without new taxes. Council members pointed to the rejection of Proposition Q as the trigger for trimming contracts rather than raising fees or property taxes further.

City Manager's July Proposal Sets Next Year Direction

City Manager T.C. Broadnax released a $6.6 billion draft budget in July 2026 that targets reductions in parks, public health and social services. Broadnax described the plan as necessary to maintain core operations while holding down overall spending growth.

The proposal keeps Austin Energy on track to add hundreds of megawatts of natural gas peaker units, a step council advanced during the same session. Officials noted the energy expansion would help meet summer peak demand without relying on outside purchases.

Numbers Behind the Changes

The approved $6.3 billion total reflects a $300 million increase over the prior year, driven mainly by personnel costs and debt service. The $38 million cut to social service contracts equals roughly 12 percent of that category, while the $3.6 million addition to the Homeless Strategy Office represents the largest single new allocation in the human-services line.

Final adoption of the 2026-2027 budget is scheduled for August. Staff will return with updated revenue estimates and any last adjustments before the vote.

Broadnax has asked department heads to identify further efficiencies ahead of that deadline so the council can avoid deeper cuts to parks maintenance and clinic hours.