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Austin Council Charts Path Forward on New Budget, Housing Rules and November Bond Package
Approved spending plan and bond directive set the stage for staff work and voter decisions later this year.
How we reported this
The Austin City Council approved a $6.3 billion fiscal year 2025-2026 budget that includes a five-cent voter-approval tax rate increase and fully funds the Homeless Strategies department. The same meeting produced a directive to staff to prepare a bond package for the November 2026 election that could reach $1.35 billion for the Convention Center and $1 billion for the Walnut Creek Wastewater Plant.
These actions follow voters’ rejection of Prop Q in November and come as the city begins to implement the new spending plan on July 1. The combination of a larger operating budget, targeted cuts elsewhere and long-term capital planning means departments must now translate council votes into contracts, zoning changes and project timelines before the fall ballot.
Service reductions and housing rules move into effect
Following the Prop Q defeat, the city is cutting over $5.2 million from social services contracts for FY 2026, including 10 percent reductions for Economic Development and Public Health. At the same time, council approved expanded downtown affordable housing incentives through new Downtown Density Bonus zoning districts that allow taller projects in exchange for community benefits. The $35 million settlement authorized for federal civil rights claims tied to the 1991 Yogurt Shop Murders also requires immediate administrative processing.
These measures affect multiple city divisions at once. Social-service providers will see smaller contracts, while developers seeking taller buildings downtown will work under the new density bonus rules. The settlement payment will draw from city reserves rather than the annual operating budget.
Bond preparation and next-year decisions
Staff now must draft the November 2026 bond package details, including the proposed Convention Center and Walnut Creek Wastewater Plant amounts, for council review. The five-cent tax rate increase embedded in the current budget will appear on property tax bills starting this fall, while the social-service reductions take effect immediately in new contracts.
City departments will begin executing the funded Homeless Strategies programs and the Downtown Density Bonus districts in the coming months. Council will receive periodic updates on bond package development before any formal placement on the November 2026 ballot.