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Bexar County Manager David Smith on Tuesday warned county commissioners the county could see historic low property tax revenues this year to fund county spending.
Property taxes typically fund around 80% of the county's budget, which has weighed in near $3 billion dollars in recent years.
Smith presented one projection during his long-range financial forecast that showed a 1.7% decline in property tax revenue for 2027.
"If that ends up happening, we'll exceed what we actually experienced in our worst year after the housing crash by quite a bit," he said.
But, as if to draw even more attention to what commissioners should brace themselves for during the next budget cycles, he added, "This would be the worst year for property tax revenue that we've seen, well certainly since I've seen, and that's going on 30 budgets now," referring to the number of annual budgets he has worked on for the county.
Smith blamed the coming decline in property tax revenue on several factors, including an increase in property appraisal protests following the installation of a new elected appraisal board. Around $97 billion in property values was protested by owners last May. The final number of protests this year won't be known until May, but the county is assuming a $6 billion dollar property tax loss from successful protests.
A jump in property exemptions passed by the Texas Legislature has led to $9 billion worth of exemptions. The number of local properties with exemptions increased by 50,000 properties compared to last year.
Smith also blamed a decline in new home construction for the loss of property tax revenue.
"I can see many new subdivisions that have been platted, bulldozed and gotten ready and the rate of new houses going into those subdivisions is surprisingly slow, but that's just antidotal on my part," he said.
Figures from the San Antonio Board of Realtors (SABOR) last year, and so far, this year, back up Smith's anecdotal claims. New home construction has long been trailing behind new home sales in the local market based on monthly market reports.
Tanya Gaitan, with the county budget office, said without county budget tightening by commissioners the general fund would exceed its target fund balance for the 2028-2029 fiscal year by $145-million dollars.
Gaitan and Smith both urged commissioners to begin that belt tightening in this next budget cycle. Gaitan presented a slide to commissioners to show them past mitigation efforts by previous commissioners' courts have included no cost-of-living adjustments for county employees, a freeze on filling vacant civilian positions, no new program changes, no new capital projects, and an adjustment to health plans for employees.
