Whether it’s drama on the dais at City Hall, heated online debates or heckling at council members’ town halls, they all point to rising tensions over San Antonio’s pending $158 million budget deficit.
Earlier this month, City Council narrowly rejected a proposal from Mayor Gina Ortiz Jones to put the city’s $489 million contribution toward a new Spurs arena on the November ballot — a move proponents said makes sense as residents face rising financial uncertainty.
“You feel the anxiety,” Jones told the Current during a recent sit-down interview. “There is anxiety in the community not only with the city’s financial situation, but ‘How did we get here? What are you spending our money on? Oh, and by the way, you better answer our questions.’”
Although some on council argue the city’s budget deficit comes down to unchecked spending, other experts point to rapidly rising health care and pension costs, along with the expense of servicing debt.
What went wrong?
One explanation is that San Antonio’s past leadership was way too eager to write big checks. And, if that’s the case, so were leaders at other big Texas cities.
Virtually every other major Lone Star State city — Dallas, Fort Worth, Austin and Houston — also faces a budget deficit for the 2026-27 fiscal year. San Antonio’s is the second-worst, trailing only Houston, records show.
To some, the data suggests Texas cities have been spending like teenagers with their parents’ credit cards.
The total operating budgets of all five of those cities have grown by an average of 78% over the past decade, according to a report published this month by right-leaning news org The Texan.
During that same time, though, the price of goods nationally has grown only about 40%, while the total population of these cities has grown by around 8%, the publication states, citing data from the Bureau of Labor Statistics and the U.S. Census Bureau.
City Manager Erik Walsh blames stagnant revenue from both property and sales taxes for San Antonio’s budget deficit. However, former District 1 Councilman Mario Bravo, who served on the dais from 2021-2023, calls bullshit on that explanation.
According to a TikTok Bravo posted last week about San Antonio’s budget deficit, San Antonio’s population has grown by about 8% since 2016 while inflation climbed by 42% over that period. Bravo said the budget should only have grown by 50% during that time. Instead, it jumped by 76%.
“This is just not economically sustainable,” Bravo said in the clip. “You can’t raise your city budget year after year at a rate that exceeds your population growth and inflation combined. Are there other factors that are affecting the budget? Absolutely. But, I think this is the biggest factor, and I’m surprised not to hear this being discussed publicly.”
Current District 10 Councilman Marc Whyte agrees.
“We do not have a revenue problem here in the city; we have a spending problem,” Whyte told the Current during a sit-down interview over the summer. “I’ve been through three budget cycles now, and it’s very clear to me that if we could get more efficient in how we spend our citizens’ tax dollars, we could fix more of our citizens’ problems.”
However, experts remain skeptical that the solution is just more sensible spending.
Health care expenses
UT-San Antonio political science professor Jon Taylor argues the end of the Biden-era COVID-19 relief funds from the American Rescue Plan Act plays a big part in cities’ current struggles to balance their budgets.
“It’s definitely that COVID relief funds have run out, and cities probably should have been planning for that in advance,” Taylor said. “Many of them did not do that.”
Beyond that, population growth has driven up the cost of providing city services, according to the professor. And that’s come as cities have grappled with inflation and a litany of federal cuts to grant and aid programs.
Brandon Rottinghaus, a University of Houston political scientist, agrees that COVID-19 relief funds were propping up many Texas cities’ budgets. However, he argues exploding health care costs and pensions for city employees, along with the cost of servicing debt, are likely the biggest factors behind the budget deficits of San Antonio and other Texas cities.
“Inflation has been increasing, so everything’s more expensive,” Rottinghaus said. “That, in particular, includes things like staff salaries, which are exploding, and health care costs are really high too. So, there’s a kind of natural increase of what things cost as a driver for this.”
The City of San Antonio exceeded its employee health care budget by $40 million.
That comes as the city this summer reached a tentative agreement on a three-year labor agreement with its police union that includes a 16.5% base pay increase for officers as well as generous health care benefits, including near-zero monthly premiums for their health plans.
What’s more, cumulative health care costs have surged by roughly 76% over the past decade — more than double the rate of general inflation — according to a 2026 survey conducted by the Business Group on Health.
Debt load
Sheryl Sculley, who served as San Antonio city manager from 2005 to 2019, repeatedly warned that overly generous collective bargaining agreements with the city’s police and fire unions, particularly their health benefits, would bankrupt San Antonio by the 2030s. Indeed, she spelled out that concern in her memoir, Greedy Bastards: One City’s Texas-Size Struggle to Avoid a Financial Crisis.
Sculley tried to curb the power and influence of both unions during her tenure and received enormous pushback. In response, the fire union organized a three-pronged public referendum that successfully restricted her power and limited pay for future city managers.
“I warned the council [that] this is going to be very difficult, but it’s something we need to do, or it will bankrupt the city,” Sculley told KSAT-TV in a 2018 interview. “Not during my tenure, but I felt like that was the financial legacy I couldn’t ignore.”
An independent study conducted before the city entered into its most recent contract negotiations with the police union ranked the San Antonio Police Department among the top three in Texas in total compensation, including salary, health care and pension.
Beyond that, San Antonio’s municipal debt hit $21.2 billion in fiscal year 2024 — the highest per capita debt load among Texas cities. Although city officials frequently boasts about San Antonio’s AAA bond rating, the city still pays interest on its outstanding debt.
Just last week, the City of San Antonio refinanced $534.6 million in debt through a bond buyback program. Although the buyback saved taxpayers $5.8 million in interest costs, the city still must pay interest on the refinanced debt at a rate of 3.1% to 3.27%, according to city officials.
“A significant chunk of city revenue is spent on the service of the debt,” Rottinghaus said.
Council is set to vote on the upcoming budget on Sept. 17.
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