City budget has the right priorities
Facing a number of financial constraints, the city of San Antonio has focused on many of the right priorities in its proposed $2.9 billion budget for the fiscal year that begins Oct. 1.
It’s a 3.1 percent increase in funding compared with last fiscal year and stays well within the budget reality that comes with Senate Bill 2, which limits future property tax revenue increases for cities and urban counties.
Among the funding priorities, the city is steering $1 million more toward domestic violence prevention — a key issue from this year’s mayoral race. These funds will support community and school campaigns, and a plan to coordinate with judges, law enforcement, health and other service providers; $600,000 to partner with the University Health System on trauma-informed care; and $1 million for homelessness initiatives, funded by a 50-cent increase to river barge and Tower of the Americas tickets, half of which will go to Haven for Hope. There’s also a $34.4 million investment in affordable housing, some of which is grant-funded. The city plans to hire a chief housing officer to bridge the gap between departments that handle various aspects of affordable housing and homelessness. Next year’s proposed budget would direct millions toward police equipment, including new laptops in vehicles, as well as 10 new community policing officers and six new sergeants to work with domestic violence victims. It funds three new firefighters on the West Side and $3.4 million for Fire Department equipment, including emergency medical stretchers and a “clean cab” initiative to keep contaminated gear away from firefighters, who mostly respond to medical calls.
There are raises, generally 3 or 4 percent, for city employees and more money toward prefunded retiree health care for police and firefighters.
There’s $117 million for streets and sidewalks, down from $130 million, and another $1 million for bike facilities. The budget also adds a three-person “micromobility” team to oversee bicycle and scooter infrastructure. It has $1.7 million for libraries and $2 million for park amenities.
All of this is necessary, and we especially applaud the renewed focus on domestic violence, which has spiked, and affordable housing, which is becoming more precarious.
The city is funding these priorities despite decreasing revenue on several fronts: from CPS Energy, telecommunication fees and interest on Treasury bills due to the Federal Reserve’s rate cut. A homestead exemption, which City Council approved as a political move during election season, will cost the city $5.8 million in revenue while saving the average homeowner $28 per year. Added together, those costs total more than $20 million, a gap the city is plugging in a number of ways, but notably by taking more money from the San Antonio Water System.
We understand the criticisms to that solution — it could result in a rate increase in the next few years, essentially undermining that homestead exemption. But SAWS is city-owned, and its revenue also comes from county residents who live beyond the city’s borders (but still use city streets and the city airport), diluting the impact of any rate increase. Of course, taking more money from SAWS isn’t going to be the solution every year. And storm clouds are gathering around San Antonio’s financial situation. The Fitch credit ratings agency downgraded San Antonio in December, a month after the firefighters union won voter approval on a charter amendment that gave it unilateral power to send contract negotiations into binding arbitration. As Fitch noted, that weakened the city’s power over one of its largest expenditures. San Antonio maintained its top rating with the other two agencies, but both said that could change if binding arbitration doesn’t favor the city.
There’s also the looming effect of the aforementioned SB 2, which starting next year will limit property tax increases to 3.5 percent without voter approval. And economists have sounded warning bells about the possibility of a recession on the horizon. The city has found a way to fund community priorities for the next fiscal year, but it could be increasingly difficult to do so over the longer term.