The Midweek #65: San Antonio’s Leaders Face Tough Options to Close Budget Deficits
I do not envy City Manager Erik Walsh and his senior team as they address budget deficits that began with a $30 million shortfall in the current fiscal year budget and are predicted to grow to $130 million by fiscal year 2028.
Mayor Gina Jones and the 10 City Council members face their own challenges, one I can’t recall occurring anytime in recent decades: approve a property tax increase for the first time in more than two decades at the same time they are asked to approve CPS Energy and the San Antonio Water System (SAWS) rate increases.
Continuing negotiations between the city and police union for a new multi-year contract further complicate the city's financial outlook. The city strives to pay police and firefighters competitive pay packages, but for decades that goal has stressed the city’s general fund and limited the ability of city officials to meet other pressing needs. The two sides do not appear close at this date, but the city does not have the funds needed to meet union expectations.
Why does this fast-growing city face such a predicament, which I wrote about in the March 9 edition of this weekly newsletter?
Take your pick in analyzing current conditions: slowing property tax growth, weaker sales tax collections, rising police and fire costs, employee healthcare inflation, and technology and infrastructure spending.
Walsh and team have only a few choices here: They can reorganize internally to find operating efficiencies, impose a civilian workforce hiring freeze to reduce payroll through attrition, and recommend the council approve raising taxes and fees.
Two moves seem politically untouchable: reducing uniformed personnel numbers, and holding public safety spending at current levels. A third move has not been publicly discussed: reducing the size of the city’s civilian workforce by resorting to layoffs.
Options are limited: About 64% of the city’s $1.69 billion general fund is dedicated to public safety, including payroll and operating expenses.
The city employs a lot of people: about 8,500-9,000 civilians; 2,850-2,900 uniformed police and 800 civilians; and about 1,900-2,000 uniformed firefighters/EMS, and 100-200 civilians. That adds up to 13,000-14,000 total employees.
If we use conservative payroll numbers, the city needs $850 million to meet current police and fire payroll and $550 million to meet current civilian payroll. If the first category is untouchable, it becomes clear that a $130 million budget deficit cannot be met by reducing civilian payroll. City services would break down in the face of such drastic staff cuts. That doesn’t mean cuts should not be made. Anyone who has ever held a private sector leadership position in down economic cycles knows that painful measures can be taken while keeping the enterprise operating. A tax increase would be more palatable for voters if they see city leaders engaging in real belt-tightening.
It would be useful for Mayor Jones and council members to ask what kind of savings could be realized over a two-year period with a general hiring freeze that makes exceptions for jobs deemed critical. It’s not something to advocate for lightly. Consultants and bean counters can make such arguments sound sensible, but the unintended consequences can be significant. It isn’t easy to manage a shrinking civilian workforce subjected to pay freezes or very minimal salary increases while police and fire continue to receive salary and benefit hikes that keep pace with inflation.
The bottom line here is that the city needs to show the public it can cut costs at the same time it joins CPS Energy and SAWS in generating increased revenues. City leaders will be doing so as working class families wrestle with inflation everywhere they turn, especially at the grocery stores, and more visibly, high gas prices at the pump.
Choices are not good here. Some of the city’s revenue challenges have been made worse by the state’s elected leadership and the legislature limiting home rule cities and their ability to levy taxes, and much of the current pain taxpayers are feeling is generated out of Washington by the Trump administration.
So let’s not blame Walsh and his team for the city’s fiscal blues. Mayor Jones and current council members did not run on campaigns to consider tax increases, utility rate hikes, or staff reductions, but that’s their job now, like it or not.
Host, bigcitysmalltown
Robert “Bob” Rivard is a veteran American journalist whose 46-year career has taken him across Texas, Latin America, and beyond. He co-founded the Rivard Report (later named the San Antonio Report) with his wife, Monika Maeckle, in 2012, building it into the city’s leading nonprofit news organization before retiring in 2022.
Bob has worked for five Texas newspapers, beginning his career on the border at the Brownsville Herald, then moving to the Corpus Christi Caller, the Dallas Times-Herald, and later serving as a foreign correspondent and chief of correspondents for Newsweek. He returned to Texas as senior editor of the San Antonio Light before becoming executive editor of the San Antonio Express-News (1997–2011).
His journalism has earned widespread recognition, including being named Editor & Publisher’s “Editor of the Year” in 2000 and receiving the prestigious Maria Moors Cabot Award from Columbia University for his reporting on Latin America and the U.S.-Mexico border.
He is the author of Trail of Feathers, a nonfiction book chronicling the disappearance and murder of journalist Philip True in Mexico’s Sierra Madre. The book, published by Public Affairs in 2005, was widely reviewed, excerpted in Esquire, and selected by People magazine as one of five recommended nonfiction works that year.
Bob now hosts bigcitysmalltown, a podcast featuring the people shaping San Antonio’s future. He and Monika live in Southtown, where she runs the Texas Butterfly Ranch blog and previously founded the annual San Antonio Monarch Butterfly and Pol…Read More
