The final slog

It's hard to get a grip on what City Council will ultimately do here. Hundreds have testified today, some urging bold investment in anti-poverty programs and public services and others saying that people can't afford another tax hike.

I'm going to just tell you where they're at now and hopefully tomorrow afternoon I'll be able to do a summary of what actually passed.

A base motion at 5¢ ... and some hurt feelings

For days there has been debate about what the starting point of the budget debate should be. Everybody wants their preferred outcome to be the starting point for discussion.

So far, it looks like the sub-quorum* consisting of Ryan Alter, Vanessa Fuentes, Chito Vela and Jose Velasquez – the D2-D5 group – won.

Vela introduced an amendment that included enough spending to put the TRE at 5¢ – the maximum Mayor Kirk Watson is willing to support. Watson and Natasha Harper-Madison (a wild card who was attending remotely) joined those four to pass the amendment.

Well, that really pissed off the members of the other sub-quorum (Zo Qadri, Mike Siegel, Paige Ellis, Krista Laine), who complained they hadn't even been able to see what was in the amendment. Worse, many of them have their own proposed amendments to the budget but the spending level is already at the highest level the mayor will tolerate.

"If the public is having a hard time following, my staff is having a hard time too," said Siegel.

Paige Ellis and Krista Laine both seized on the fact that city budget staff projected that this spending plan would leave the city's rainy day fund slightly below the 17% target by FY '29. In order to maintain the 17% reserve level, Council would have to bump the tax hike up to 5.15¢, which Watson won't support.

The victors stressed that the 17% policy is new – it was only 14% as recently as 2021 – and that staff was merely making a projection. It is a tiny dip into reserves at a time when the federal government is abandoning the social safety net, they argued.

"The rainy day is now!" said Vanessa Fuentes.

Paige Ellis shot back that the policy was established to prevent the city from facing higher interest rates on its bonds. Increased payments on interest "is not money that meets any need," she said.

At 8:30 the mayor granted Council a recess until 9 pm to digest. We'll see what happens!

*Sub-quorums are a feature of the city's interpretation of state open meetings law, which bars a majority of Council members from deliberating on official business in private. Therefore, CMs often form sub-quorums of 4-5 members to craft legislation on a given issue.

If the tax rate election fails, what do we cut?

Whatever TRE is presented to voters, City Council needs to prepare for the possibility that it will fail.

If that happens, what do they cut?

Mike Siegel argues there should not be a distinction between the balanced base budget proposed by the city manager and what Council members have proposed adding in the TRE. It is all "one budget" and if the TRE fails, he says, Council should consider it all when seeking cuts.

In the event of a TRE failure, city staff should "identify reductions across each general fund department, proportional to each department’s share of the final FY26 budget," wrote Siegel.

That's almost certainly not an approach that everyone on Council will agree to because it will result in cuts to police, fire and EMS. It will also likely prompt opposition from the public safety unions. Michael Bullock, head of the Austin Police Association, has already begun to campaign against the idea online:

Now, to be clear, due to a law approved by the legislature in 2021, the city cannot actually reduce the police department's funding. It could only reduce the police spending the city manager proposed in the FY '26 budget.

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