Facing a major budget deficit and a struggling economy, the San Antonio City Council approved a 3.9% property tax increase Thursday — the city’s first in more than three decades.
The 7-4 vote largely split members along socio-economic lines, with wealthier Northside districts opposing the 3.9% increase and members from less affluent districts voting in favor.
Initially, nearly all council members balked at raising taxes when inflation is already putting so many residents in a financial strain.
But weeks of reviewing alternate budget scenarios led a majority to believe that more spending reductions — on top of the $90 million worth of cuts already planned over the next two years — would hit most vulnerable residents too hard.
“[In] the conversations I’ve had [with residents] … it’s actually been the most humble among us who have been the first to say, ‘yes,'” said Councilman Edward Mungia (D4), whose Southside district is among the poorest.
“…That’s a stark contrast with those who have had the most, people who own more than one parcel of property, saying that they can’t afford that.”
This year slowed economic growth left many Texas cities and counties in a similar boat, looking high and low for cuts to balance their budgets.
In San Antonio, that meant a public reckoning over some big recent economic development investments, including whether to help fund a new Spurs arena, led by Mayor Gina Ortiz Jones.
A deeply divided council still never found consensus on a different approach, however, and City Manager Erik Walsh told them this week that they’d run out of time.
The city is legally obligated to pass a balanced budget every year, and voting down the rate hike would delegate an additional $75 million worth of cuts to city staff.
Councilwoman Ivalis Meza Gonzalez (D8), who was considered a swing vote on the tax hike, said that was a bridge too far, and ultimately split with other Northside members and approved the increase.
“These right-sizing initiatives do not cut to the bone … [but] if the property tax increase were to fail, it would fall to the city manager’s office,” said Meza Gonzalez.
“I believe that amounts to an abdication of my responsibilities. … I really want my colleagues to recognize that decision.”
The tax increase means the average San Antonio home, valued at $234,000 with a homestead exemption, would pay an additional $35.43 per year.
But a city analysis of the breakdown by council district highlights the different equation the members faced — the increase amounts to less than $2.50 per year in District 6, or more than $100 per year in District 1.
Jones joined Councilmembers Marc Whyte (D10), Misty Spears (9) and Marina Alderete Gavito (D7) in voting nay on the rate hike.
“We owe it to our neighbors to make the tough cuts, and unfortunately, this budget shows we punted,” Jones said. “Our neighbors are left wondering if this tax increase was necessary, or whether we can definitively say it’s the lowest it has to be. I think the answer to both of those questions is no.”
This story first appeared in the San Antonio Report.
