TOO LONG DIDN’T READ

1. Without Prop Q, annual property taxes will increase by 3.5% anyway since that’s the rate increase allowed without voter approval. Property taxes will increase from 47.76 to 52.4017 cents per $100 of property value, which is an increase of $46.42 per $100,000, and the City as a result will get an additional $81 million or so of revenue above its 2024-2025 property tax revenue.

2. With Prop Q, annual property taxes will go up by an additional $50 per $100,000 in property value (in addition to the $46.42 per $100,000), and the City will get an additional $110-115 million (in addition to the $81 million) in revenue, compared to if voters reject Prop Q.

3. The additional ~$110-115 million from Prop Q will go to the following (there's a few million I haven't confidently been able to trace yet):

• ~$45 (±5) million to homelessness services

• $30 (±5) million to the city’s rainy day “General Fund Emergency Reserves Fund”

• ~$10 million to fire departments

• ~$7 million to parks and recreation

• ~$6.3 million to emergency medical services

• ~$3.4 million to public health/trauma/safety

WHO I AM

I'm not affiliated with any group pushing for/against Prop Q. I have no agenda here except accessible data. I’m just a regular Austin homeowner and resident who cares about both government efficiency and the provision of good government services to residents.

I wanted to make an informed choice about Prop Q, but I found it incredibly hard to find accurate, nuanced, objective information about the costs and benefits. I felt like I needed answers to the following questions: How much additional revenue will Prop Q generate? Where will the money go? What will happen if Prop Q is rejected? How much will it cost homeowners at various property values?

The challenge with answering these questions is that the City approved a $6.3 billion budget for next year that assumes that voters will approve the rate increase [see p. 49 of Budget], so it’s hard to figure out what the budget will look like if voters reject the rate increase. Adding to this challenge is the fact that the approved budget is more than 1300 pages long…

But I did some digging and wanted to share some objective data for folks who would find it helpful but who don't want to spend hours like I did compiling all of this.

WHAT WILL AND WON’T CHANGE WITH PROP Q

PREFACE

First, the City of Austin is allowed by state law to increase taxes each year by up to 3.5% without voter approval [see p. 80 of Budget]. This means that, even if voters reject Prop Q, taxes will almost certainly go up by 3.5% anyway.

Currently, the rate is 47.76 cents per $100 of a home’s value [see p. 1008 of Budget]. Assuming that the city raises taxes by the maximum percentage allowed without voter approval, the city will raise taxes to 52.4017 cents per $100 of a home’s value [see p. 2 of Budget]. And with voter approval on Prop Q, the city will raise taxes to 57.4017 cents per $100 of a home’s value [see p. 1008 of Budget].

IMPACT TO REVENUE FOR THE CITY

This Year: For the 2024-2025 fiscal year, the taxable valuation of property in the city was about $235 billion ($235,095,414,719) [see p. 53 of Budget]. And at the current property tax rate of 47.76 cents per $100 of a home’s value, the City is allowed to receive property tax revenue of about $1.12 billion ($1,122,815,701) [see p. 53 of Budget].

Next Year (2025-2026): The city projects the taxable valuation of property in 2025-2026 will be $229.8 billion ($229,822,131,556) [see p. 53 of Budget].

At the inevitable new rate of 52.4017 cents per $100 even if voters reject Prop Q, the allowed revenue will be about $1.204 billion (($229,822,131,556 / 100) x $.524017 = $1,204,307,039 ). This is an $81,491,338 increase from 2024-2025’s property tax revenue ($1,122,815,701-$1,204,307,039=$81,491,338).

At the Prop Q rate of 57.4017 cents, the revenue will be $1,319,218,104.89. This is a $196,402,403 increase from the 2024-2025 revenue. It’s a $114,911,065 increase above what the City is allowed to receive if voters reject Prop Q.

A variety of sources estimate that the actual revenue from Prop Q will be $110 million (I'm assuming the difference is because the $114.9 number doesn't account for tax delinquencies).

In other words, voters are deciding on whether to increase the city’s revenue by about $110-115 million more than what the city’s revenue would increase by if voters rejected Prop Q.

IMPACT TO HOMEOWNERS

Taxes will increase regardless of whether voters approve or reject Prop Q. Prop Q adds to your annual property tax bill $50 per $100,000 of property value (compared to a no vote on Prop Q). Here’s the full table of calculations:

WHERE WILL THE EXTRA ~$110-115 MILLION GO?

WHAT THE BALLOT MEASURE SAYS

The ballot measure itself is a little vague but does outline some specific uses: “programs intended to increase housing affordability and reduce homelessness; improve parks and recreation facilities and services; enhance public health services and public safety; ensure financial stability; and provide for other general fund maintenance and operation expenditures included in the fiscal year 2025 -2026 budget”

WHAT AN EARLIER CITY DOCUMENT SAID

But on page 5 of the City’s “Tax Rate Election Scenarios” document, there’s a list of where the money would go in the event of a tax rate election for a 5-cent increase above the rate allowed without voter approval. And that document tells us the following:

It appears that there was an estimate of a $108.09 million ($108,087,951 to be exact) increase in revenue from Prop Q that would go to the City’s “General Fund” for the 2025-2026 year. [According to the “Tax Rate Election Scenarios” document, with a tax increase of 5 cents above the rate increase that’s allowed without voter approval, the City’s “General Fund” will receive $1,586,609,795. Without any voter approval, the revenue will be $1,478,521,844. The difference between these two numbers is the $108.09 million]

• $30.76 million out of this 108.09 million will get transferred to the City’s rainy day “General Fund Emergency Reserve Fund." According to page 576 of the Budget, this fund is for “costs related to a natural disaster or calamity or an unexpected liability created by Federal or State legislative action,” and there’s an approval process that has to be cleared for this money to be spent. 

• The remaining $77.3 million ($77,326,417) out of this $108.09 million will go toward “ongoing” expenditures for the following items, grouped by category: 

• HOMELESSNESS SERVICES ($50,542,647) 

• Rapid Rehousing New Beds (12 million) 

• Emergency Shelters (10 million) 

• Marshaling Yard Operations (8 million) 

• Youth Homelessness Services (5 million) 

• Permanent Supportive Housing - continue existing support (4.8 million) 

• Bridge Shelter Housing - HEAL (3 million) 

• Permanent Supportive Housing (new support) (2.7 million) 

• Post 2027 Permanent Supportive Housing Units (2 million) 

• New Shelter Seed Funding for Community Orgs (1.3 million) 

• Street Outreach Staffing (1,125,057) 

• Rapid ReHousing - Case management (617,590) 

• PARKS AND RECREATION ($10.3 million) 

• Parkland Maintenance (7.3 million) 

• Natural Land Restoration and Wildfire Prevention (3 million) 

• PUBLIC HEALTH AND SAFETY ($3,483,770) 

• Core Public Health Grants at Risk ($1,533,770) 

• Community Violence Intervention Program Funding (1 million) 

• Trauma Recovery Center ($500,000) 

• Williamson County Child Advocacy Center ($300,000) 

• Collective Sex Crime Response Model Staff ($150,000) 

• FIRE DEPARTMENT ($6 million) 

• Restore AFD Overtime ($5 million) 

• AFD Wildfire Mitigation ($1 million) 

• EMERGENCY MEDICAL SERVICES ($3 million) 

• EMS Funding (Non Specific) (3 million) 

• ARTS ($2.5 million) 

• National Endowment for the Arts Grant Replacement (1.5 million) 

• Creative Space Assistance Program (1 million) 

• ECONOMIC DEVELOPMENT ($1.5 million) 

• Austin Civilian Conservation Corp (1.5 million) 

WHAT THE APPROVED BUDGET SUGGESTS

Based on the approved budget, it appears that some of the original allocations have changed. I haven’t been able to account for where all of the projected revenue from Prop Q will go, but here’s what I’ve been able to account for and feel confident about (based on whether they were in the original proposal). I’ve generally excluded line items that are in the approved budget that weren’t included in the original “Tax Rate Election Scenarios,” since it’s possible that those things are being paid for by something other than Prop Q revenue. So there’s some undercounting here, but generally the approved budget tracks what was originally proposed in terms of the general things that the money will go to.

• HOMELESSNESS: $45,147,287 [pp. 385-386 of Budget] 

• Shelters ($31,373,850) 

• One-Time Funding for Emergency Shelter Operations: $2,745,950 

• Funding for operations at the Marshaling Yard emergency shelter ($8,004,050 million) 

• Rapid Rehousing New Beds (Increase in “contractuals for rehousing new beds”) ($12 million) 

• Funding for investments in non-City shelters to increase the number of available shelter beds ($5,123,850) 

• Funding for 8th Street Shelter operating contract ($3.5 million) 

• Permanent Housing Support ($10,020,739) 

• Funding to Support Individuals in Transition from Shelters into Housing (Bridge Shelter Housing) ($3 million) 

• Support Services for Permanent Supportive Housing: $2.26 million (“Tax Rate Election Scenarios” originally listed as 2.7 million) 

• Funding to Provide Permanent Supportive Housing Services: $4,760,739 

• Homeless Strategy Office ($1,252,698) (“Tax Rate Election Scenarios” originally listed “Street Outreach Staffing” at $1,125,057) 

• Partial-year Funding for 12 positons to expand outreach and encampment management: 925,050 

• Departmental Oversight budget: 188,987 

• Remaining 138,661??? 

• Other ($2,500,000) 

• Street Outreach to Unsheltered Individuals ($2 million) 

• Funding for Homeless Navigation Services ($500,000) 

• AUSTIN FIRE DEPARTMENT: $9,260,664 [pp. 357-359 of Budget] 

• One-time overtime funding: 8,260,664 (TRES originally listed 5 million) 

• Wildfire Awareness, prevent, and preparedness programs: 1,000,000 

• PARKS AND RECREATION: $7,235,491 [pp. 452-454 of Budget] 

• Full-year funding for 60 positions to address parkland and grounds maintenance needs: $5,983,435 

• Full-year funding for 3 positions to implement land management plans for high-risk parkland natural areas: $1,252,056 

• EMERGENCY MEDICAL SERVICES: $6,289,574 (originally $3 million unspecified) [p. 317 of Budget] 

• Addition of 22 positions and medical equipment to expand a mental health crisis response team: $2,299,044 

• Addition of 24 personnel for Basic Life Support units: $2,284,442 

• Addition of eight positions to support growth in 9-1-1 calls: $861,288 

• Addition of eight commanders to provide oversight of additional units: $844,800 

• PUBLIC HEALTH AND SAFETY: $3,379,189 [p. 1350 of Budget] 

• One-Time funding for core public health grants at risk: 1,579,189 (originally 1,533,770) 

• Community Violence Intervention Program Funding: 1,000,000 

• One-Time funding for child advocacy services in Williamson County: 300,000 

• Trauma Recovery Center: 500,000 

• ECONOMIC DEVELOPMENT: $864,000 [p. 1348 of Budget] 

• Austin Civilian Conservation Corps: 864,000 (originally 1.5 mil) 

These are simply the line items that I feel confident depend on Prop Q. If you add the numbers up, you'll see that there are a few million dollars I haven't accounted for. It's likely that some of the expenditures in the Approved Budget that weren't in the original "Tax Rate Election Scenarios" document are being funded by Prop Q. For example, the Austin Chronicle says that $51.5 million (and not just the $45 million I've accounted for) will go toward homelessness services.

The City says the following are part of the budget, but it’s unclear to me if they’re being funded by Prop Q or not.

• $1.3 million for the Family Stabilization Grant to address economic insecurities, with a focus on housing. 

• $800,000 in one-time funding for off-site animal adoption services to help relieve the pressure on the Austin Animal Shelter. 

• $350,000 to provide navigation services for families and victims of violence and abuse. 

• $350,000 to support shelter operations for victims of domestic violence. 

SOME BACKGROUND INFO ON THE GENERAL FUND

Although it appears that virtually all of the revenue from Prop Q will go toward the above-listed programs and services, to the extent that a small portion of it doesn't go toward those programs/services but instead goes toward "other general fund maintenance and operation expenditures included in the fiscal year 2025-2026 budget" as allowed by the ballot measure, here's some info on what the General Fund is.

The General Fund for 2025-2026 is 24% of the city's total 6.3 billion budget [see p. 30 of Budget]. In 2024-2025, the budget was $1,425,425,000; in 2025-2026, the budget is $1,579,157,000 [see p. 32 of Budget]. This is an increase of $153,732,000. The 2025-2026 General Fund budget is allocated for the following areas [see p. 31 of Budget]:

1. Police (33.2%) 

2. Fire (16.7%) 

3. Emergency Medical Services (9.8%) 

4. Parks and Recreation (9.0%) 

5. Library (5.1%) 

6. Social Services Contracts (7.1%) 

7. Austin Public Health (4.2%) 

8. Transfers (6.8%) 

1. $40.5 million transfer to Budget Stabilization Reserve Fund 

2. $11.6 million for "economic development activities including property tax rebates associated with incentive agreements and other transfers to Economic Development" 

3. $11.1 million for the "Housing Trust Fund to create or preserve reasonably priced housing in the city of Austin" 

4. $8 million for “facility maintenance and renovations” 

5. $6.6 million for development fees and “notifications to residents about land development code changes” 

9. Municipal Court (2.6%) 

10. Animal Services (1.6%) 

11. Forensic Science (1.0%) 

12. Planning (1%) 

13. Housing (.8%) 

14. Arts, Culture, Music and Entertainment (.7%) 

15. Homeless Strategies and Operations (.4%) 

ANSWERING SOME QUESTIONS I’VE RECEIVED

Q1: "is this tax rate increase permanent, and will future (inevitable) increases be stacked on top of it?"

A1: The short answer is that the approved tax rate will continue at that rate for subsequent years until "otherwise ordained."

In the most tax-heavy scenario possible (Prop Q passes, and then 3.5% rate increases for each subsequent year), the difference in year 2029-2030 between yes on Prop Q and no on Prop Q is 5.737616 cents per $100 (65.869772 cents minus 60.132156 cents), which translates to about $57.38 per $100,000 of home tax value. So if you have a $1 mil home, then without Prop Q you would be paying $601.32 in annual property taxes in 2029-2030, and with Prop Q you would be paying $658.70 in annual property taxes.

According to Part 1 of the Ordinance passed on August 13, 2025: "The City Council levies, approves, and orders to be assessed and collected for the Fiscal Year 2025-2026, and for each subsequent calendar year until otherwise ordained, on all property in the limits of the City of Austin that is not exempt from taxation, a property (ad valorem) tax at the rate of $0.574017 per $100 of taxable value."

The city has a "best practice" to not have tax rate elections more than once every four years. [See p. 926 of Budget] On one end of the spectrum, the city could presumably reduce the tax rate in those four years; in the middle of the spectrum, the city could maintain the Prop Q rate for those four years; at the maximum end of the spectrum, the city could increase the rate by 3.5% each year without voter approval.

At the maximum end, assuming a 3.5% yearly increase, in 2026-2027 the annual tax would presumably be 59.41076 cents per $100, in 2027-2028 it would be 61.490137 cents, in 2028-2029 it would be 63.642292 cents, and in 2029-2030 it would be 65.869772.

If voters reject Prop Q, and there's a 3.5% increase each year without voter approval, then in 2025-2026 it would be 1.035 x 47.76 cents = 52.4017 cents, in 2026-2027 it would be 54.235759 cents, in 2027-2028 it would be 56.134011 cents, in 2028-2029 it would be 58.098701 cents, and in 2029-2030 it would be 60.132156 cents. So a difference of about 5.74 cents in 2029-2030.

Q2. "are they required to spend the money on those things, are is that just what they're budgeting for?"

A2. The budget authorizes the city to spend that money on those things.

According to section 102.009(b) of the Texas Local Government Code: "After final approval of the budget, the governing body may spend municipal funds only in strict compliance with the budget, except in an emergency."

According to Article VII, § 8 of the city charter, "No funds of the city shall be expended nor shall any obligation for the expenditure of money be incurred, except in pursuance of the annual or interim period appropriation ordinance provided by this Charter." The ordinance referred to is the one passed on August 13, 2025 that adopts the 2025-2026 budget.

However, § 8 of the city charter further provides: "At the close of each fiscal year any unencumbered balance of an appropriation shall revert to the fund from which appropriated and may be reappropriated by the city council. The council may transfer any unencumbered appropriation balance or portion thereof from one office, department, or agency to another. The city manager shall have authority, without council approval, to transfer appropriation balances from one expenditure account to another within a single office, department, or agency of the city."

I don't have any data on how often there are unencumbered balances at the end of each year, or what amounts those unencumbered balances are, or where those balances get reallocated to. Maybe someone more informed can provide some info in the comments. Of course, the formal way to keep city officials accountable on this if Prop Q passes is to demand the information from them, and to vote for city council members accordingly in the event that they reallocate funds in ways you disagree with (or agree with).