Public finance

Texas's largest cities are grappling with widening budget shortfalls driven by inflation, slowing sales tax growth, and stagnant or falling property values. Dallas faces a $51 million gap, Fort Worth $94 million, San Antonio $158 million over two years, and Austin a structural deficit that could exceed $100 million within a decade. Responses vary: Dallas plans layoffs, reduced library hours, and higher non-resident fees at attractions like the zoo; Fort Worth is cutting vacant positions and pay raises while raising its tax rate; Austin raised its rate to the legal maximum without voter approval; and San Antonio is considering its first property tax hike in over 30 years alongside roughly $90 million in cuts.

The squeeze stems partly from a state-imposed 3.5% cap on annual property tax revenue growth without voter approval, with Governor Greg Abbott and legislators pushing further restrictions next session. San Antonio's mayor also wants voters to weigh in on $489 million in public funding for a new downtown Spurs arena, with a council vote on placing the measure on the November ballot pending. Experts point to tax exemptions and restrictive housing policies as compounding factors, urging denser "missing middle" development to broaden tax bases and ease pressure on strained budgets.