Texas Governor Greg Abbott has spoken out against a move by the Austin City Council that could see the maximum property tax increase by 25 percent for the next fiscal year, to 60 cents per $100 in valuation.

Newsweek contacted Governor Abbott and the Austin City Council for comment on Friday via email and telephone respectively outside of regular office hours.

Why It Matters

Austin City Council is estimated to have a $33 million shortfall for the next fiscal year, which comes against the backdrop of federal funding cuts and additional spending requirements for the police and fire department.

Abbott’s move to oppose potentially substantial new property taxes is likely to find a favorable audience from Texas Republicans.

What To Know

On Thursday the 11-strong Austin City Council voted unanimously to set the maximum property tax for the next fiscal year at 60 cents per $100 in valuation, a substantial increase on the current 47.76 cents.

This doesn’t necessarily mean the council will end up proposing an increase to 60 cents and any such move would have to be approved by voters due to a 2019 state law which requires such a move for any tax increase of more than 3.5 percent over a year.

However the move sparked a hostile reaction from Governor Abbott who shared an article from The Austin American-Statesman about Thursday’s vote.

The governor added: “Hey #txlege [Texas Legislature]—This. Right here … We must stop them from raising property taxes & stop spending increases.”

In 2024 the Austin Firefighters Association was awarded an eight percent pay rise by an arbiter, with negotiations over a new four-year contract having begun this week.

In addition, a draft budget drawn up by City Manager T.C. Broadnax predicts the Austin Police Department’s budget will rise by around $92 million between 2024 to 2027, including a six percent pay award to officers as stipulated by their labor contract.

Property tax bills in Texas have increased dramatically in recent years, rising by 26 percent between 2019 and 2023 according to Cotality, a property data company.

In June Governor Abbott signed two bills that, if approved by Texan voters in November, would grant property tax cuts to many Texans. The measures would raise the existing homestead exemption from $100,000 to $140,000 for all homeowners while also increasing it to $200,000 for those with disabilities or those aged 65 and above.

What People Are Saying

Speaking to The Austin American-Statesman Austin Mayor Kirk Watson welcomed Thursday’s council vote which he said would provide “flexibility.” He added: “We want to avoid being in a situation where we’re precluding consideration of where [Council] might want to end up.”

In a joint statement Mike Siegel and Zohaib Qadri, two progressives on the Austin City Council, wrote: “We knew this time would come. We can no longer rely on an unstable framework of one-time funding and unpredictable revenue streams to fix and sustain core services.”

What Happens Next

According to Mayor Watson the Austin City Council will begin discussions next week on proposed changes to Broadnax’s draft budget, before a final vote on a new budget which is expected in mid-August.