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Bexar County commissioners on Tuesday voted 3-2 to approve a much leaner county budget of $2.6 billion and keep the property tax steady to help fund it as indicators warn of a slowdown in county revenue ahead.
This next fiscal year's balanced budget, which takes effect on Oct. 1, is $200 million lower than last years to start with.
Before the budget adoption vote, commissioners held several budget talks during their meetings and workshops, listened to input from county employees and county taxpayers, and held a final public hearing. The talks among commissioners were tense at times over the best way to close a $145 million budget deficit caused by shifts related to property taxes and a major loss of federal funding. There were no cuts to basic services, including public safety.
Commissioners kept the property tax rate unchanged for three decades with adoption of the current tax rate of just under 30 cents per $100 of property value. To balance the budget, commissioners dipped into $68 million in surplus funds, froze new capital projects and employee cost of living increases, and they chose not to fund 42 county jobs after federal COVID relief dollars for those positions runs out under the American Recovery Plan Act (ARPA). They did vote to continue county funding for 49 positions initially funded by ARPA.
While commissioners used county surplus funds to fund the budget, County Judge Peter Sakai sought to silence critics of the county's financial standing.
"This county at this time, regardless of the comments made on this dais, this county is on solid foundational ground," he said.
Precinct 3 Commissioner Grant Moody, from the dais, said cuts to spending did not go deep enough and voted against the spending plan, as did Precinct 4 Commissioner Tommy Calvert, who said he could have used more analysis by the budget office to make more informed budget decisions.
Moody and Precinct 1 Commissioner Rebecca Clay-Flores sparred over the budget with Clay-Flores calling the budget balanced, with Moody still pointing the finger at the surplus of $68 billion surplus to make it happen.
County leaders long wrestled with the "COVID cliff," the known day when those funds were set to end, including funds for the salaries of some county workers. Those ARPA COVID relief funds were signed into law in March 2021 and used to fund positions related to public and mental health and social services but are running out at the end of the year.
The annual county property tax bill for a median priced home of $315,000 will be $945, but of course, that tab does not include other taxing entities, including school district property taxes, which make up the lion's share of the combined property tax bill that is going out to mailboxes.
Precinct 2 County Commissioner Justin Rodriguez, earlier this month, joined other county leaders during budget talks to warn county taxpayers of more lean times to come. The county's coffer has been eroded by less property tax revenue due to lower property appraisals, an increase in property tax exemptions, and fewer new properties available to tax due to slower new home and business construction.
With all those threats to county tax revenue, Rodriguez predicted voters could soon be asked to raise county property taxes to keep up with growth.
"The infrastructure needs, the flood control needs are growing in a growing community," he said in early September. "So, that's going to require, more than likely, some kind of tax rate increase that maybe the citizens have an opportunity to weigh in on. I think that's coming in 2027."
County Manager David Smith, who has held his position for 15 years and started with the county as a budget intern in 1997, called it the toughest budget he has ever had to put together, based on the incoming property tax revenue, or the lack thereof. He said that includes the housing crash that led to the Great Recession.
Smith announced his retirement for Dec. 31, and he had an outgoing warning for future commissioners' courts on maintaining public works for the miles of subdivisions sprouting up in unincorporated areas of the county in recent years.
"This growing, especially the unincorporated part of the county, is going to have unprecedented demands for infrastructure to support that group, both in terms of road, subdivision maintenance ... and flood control," he said.
The county is left with the public work maintenance of those new housing subdivisions after the developers finish and the last homes are sold.
Smith said should commissioners decide themselves they could begin talks now with their constituents about the need for a future property tax hike needed to meet those challenges. He said they could tell their constituents they "held the line" on property taxes, but now constituents should consider a tax rate needed for the future. Smith thought commissioners would be "well-served" in those talks because so many cities and local governments are raising their tax rates.
