Workshops are big this week! There are two:
- Fiscal budget bad news for next year
- Riverfront parks update, for summer 2025
But First, Workshop Citizen Comment:
Just three speakers. Two in favor of fencing off the river and making people enter through managed entry points.
- San Marcos River Foundation Director (Virginia Parker): Last weekend, the river was busier than it ever was last year. Water quality is terrible. Lots of glass and styrofoam and trash. Swimmers get stuck under tubes. It’s dangerous. Residents don’t want to go on the summer weekends, but we’re the ones who pay. Monday’s clean up was worse than any clean up last year. In favor of managed access.
- Board member of Eyes of the San Marcos River. In favor of managed access. Clean up does not suffice. You must protect the river. Monday morning clean up was astonishing. Piles of glass bottles in water. Cypress trees stuffed full of cans. Trashed tubes everywhere.
One speaker on the AI Data Center:
3. The data center is going to be built, either way! Your choice is this: is the data center going to be in the city – regulated and taxed – or the county – unregulated, untaxed? It’s not bitcoin mining, it’s LEED Certified!
Workshop 1: Fiscal Budget Bad News
Council starts planning the budget in January, and passes the budget at the end of September. Here’s where we are in the process:
So we’re starting to get our tax revenue estimates, but we don’t know for sure how much we’ll get until the end of July.
Ok… this sounds worrisome…
Ruh-roh, Shaggy.
So basically, our budget is has a big gash in it? We can balance the budget with a bandaid, or we can stitch it up and balance the budget responsibly.
One hurts a lot more, but leaves us in better shape longterm. Yikes.
Good lord. It is not a good sign when your city staff is putting melodramatic visuals like this in your slide show.
…
So why is this happening?!
Ok, so property values are falling from their post-Covid peak. This is good in some ways – it’s getting a little more affordable to live here! But it does mean that the city gets less property tax income.
Next, we didn’t build as much this past year, so we’re not adding as many new properties to the tax roll as we have in the past. Also sales tax is down, and inflation is up.
And yet, we keep growing:
Our budget stayed flat while inflation took a bite out of everything:
Amanda: Did all departments hold their budgets flat?
Answer: there were some exceptions last year, due to existing contracts, but no exceptions this year. All departments held flat this year.
Mid-year, the city reduced spending by $100K, across all departments.
Alyssa: How did you all reduce $100K?
Answer: They looked at the unspent budgets over the past three years, and used that to proportionally allocate the cuts.
These are not one-time cuts – they’re permanent cuts. But departments are allowed to make requests for reinstatements.
So we have less money to spend per resident:
…
Some details on the tax revenue
We get both sales tax and property tax. Let’s take these one at a time:
This chart is a little complicated. Each of those numbers is its own computation. So you see where it says “December 24, -2.3%”? What that means is that they added up the twelve months in all of 2023, and added up all twelve months in 2024, and found that the 2024 year was 2.3% less than the 2023 year.
Some cities are up, some are down:
Here’s who does the most business in town, and hence pays the most sales tax:
And here’s how much different industries have tanked recently:
Dang.
Onto property taxes:
(This isn’t the clearest visual aid, perhaps? I’d probably separate the orange line and the blue bars into two separate graphs.)
Basically, the total property values increased a lot from 2022 to 2023. Then they started slowing down from 2023 to 2024 and 2025. And now, heading into 2026, they’re going backwards.
This is a big bummer.
We’ve built some new stuff, so that helps bring in more revenue:
This is again a wee bit confusing, but let’s take a crack at it:
This is the difference from year-to-year. If it’s positive, then you got more money than last year. If it’s negative, you got less money than last year. You can see that lately, blue has gone negative. Next year, it’s projected that blue is so negative that it outweighs the green.
Lorenzo: Do we have any commercial products on the horizon?
City Manager: Yes… you already heard from the AI dude. But there’s a lot more in the pipeline. Buccee’s, IKEA, HEB, multifamily, warehouse buildings. Lots of stuff will get added to the payroll over the next few years.
Ok, let’s shift to tax payers.
We have not raised the tax rate in the past few years. But property values have fallen. If we want to bring in the same amount of money, we would have to charge a little more:
So here, the tax rate jumps by 4%, and the average person pays the same amount in property taxes. This is called the “No New Revenue” rate.
We already made some midyear cutbacks, because we got reports that things were going badly:
Also yearly fee reviews.
Here’s where this leaves us:
Ok, all that shaves us down from $12 million over budget to $1 million over budget. (The blue “$3 million shift” is balancing the budget without being structural about that.)
Also ARPA and other Covid money is going away in 2027. That $1.4 is money the city will have to pick up.
How much does it help to raise taxes?
So each cent increase helps a lot.
…
So now let’s go back to this conversation:
Are we going to take the bandaid on the left, or the painful, responsible path on the right?
Note that in Option 4, everyone’s taxes stay flat. The extra $900K comes from new buildings. It would help offset inflation and implement council priorities.
….
Look, I believe in government. I believe that the role of government is to redistribute wealth and use it to solve collective problems. Starving your government makes inequality worse.
I get that San Marcos has endemic poverty, and people need every possible cent to make ends meet. People resent taxes. But I still believe in them. So I would vote for options 3 or 4.
….
Hang in there! There’s still a whole ‘nother workshop on fencing off the river!
…
What’s not in the budget?
So the departments made $100K in permanent cuts. They’re allowed to request it back, though. These are scrutinized to see if they’re “needs” or “wants”. (Council asks to see a list of all these cuts, as well.)
What else isn’t in the budget?
Remember back in January, when Council dreamed big? We got all excited about things like:
- Tenants Bill of Rights and advocacy program
- Office of Violence Prevention
- Increasing HSAB funding for social programs
None of those are in the budget yet.
….
One last thing: Back in January, we talked about how San Marcos was going to move towards a participatory budget model. The idea is to get the community input, and particularly those people who generally are disenfranchised by government. (In other words, don’t just go and ask all of Mayor Jane’s BFFs what they think about the budget.)
How’s that been going?
Staff did three things:
- Consult with the Neighborhood Commission
- Have a bunch of Dream Sessions
- Have an online survey
Amanda and Alyssa are FURIOUS over this. All of the outreach methods have gotten hijacked by the same old people who always have the ear of Council. This did not connect with the people on the east side.
For example, here’s where the survey responders live:
See that densest cluster in the southwest? That would be Kissing Tree, ie a bunch of wealthy old white retirees. That is not who we mean when we say “get the input of hard-to-reach San Marcos residents”.
Time for this meme:
(via) mmhmm.
In the city’s defense, this is an incredibly difficult problem to solve. What you have to do is form relationships with community leaders in your hard-to-access regions – church leaders, barber shops and hair salons, etc. It is extremely time-intensive.
…
Time for Council direction! Roughly speaking, which road do we want to take?
More specifically, which scenario is Council leaning towards?
This isn’t a final, binding decision. But you don’t want city staff to go in a completely different direction from what Council is willing to approve. You want staff to prepare options that are aligned with what Council is thinking.
Lorenzo has a good question: is that extra $900K enough address the budget requests and council initiatives?
Answer: Yes, it’s roughly enough to get us to a stable place, and to implement council priorities:
- Tenants Bill of Rights and advocacy program
- Office of Violence Prevention
- Increasing HSAB funding for social programs
Council direction
Jane: Somewhere between #3 and #4.
Lorenzo: #4
Shane: #4
Alyssa: #4, as long as the extra is dedicated to social services, public facing programs, and council priorities. I have to be able to explain this to my neighbors.
Matthew: #3
Amanda: between #3 and #4. People must see tangible benefits to their tax dollars. That can only happen through the tenants rights and HSAB funding, ie council initiatives. If it doesn’t include council initiatives, I can’t justify this to my constituents.
Saul: #3
I agree with all of them! I’d go for #4 myself.
The San Marxist 