Austin Starts FY2027 Budget Talks With a $26M Gap

Austin has kicked off its FY2027 budget process with a projected $26.4M deficit, according to early estimates from the city reported by Community Impact. This is before any major changes. Just current trends.

Revenue is only expected to grow ~3%, while costs keep rising. Most of that growth is already committed to public safety contracts, pensions, healthcare, and prior raises.

At the same time, one of Austin's biggest revenue drivers is slowing. New construction is projected at $2.8B, about 10% below forecast.

City officials were explicit about what is behind it. As Eric Nelson put it, "Economic growth is slowing, particularly in the technology sector. We are seeing occupancy challenges in office and multifamily properties." In other words, the city is now planning around a softer Austin economy.

To close the gap, a mix of options is on the table:

• ~$19M in EMS and fire cuts
• ~$9M reduction in police overtime
• $8.8M pulled from the Housing Trust Fund
• $14M from reserves
• and a potential ~$154/year property tax increase

None of these are final, but they show the scale of tradeoffs. The takeaway is simple: Austin's growth is slowing, costs are not, and the city is starting to adjust.