San Antonio’s next mayor will need to tackle city’s $200 million budget deficit

The next mayor of San Antonio will have no shortage of challenges, including a nearly $200 million budget shortfall over the coming fiscal years, City Manager Erik Walsh said Wednesday.

Due to declines in property, sales and hotel-occupancy tax revenue, city staffers anticipate a $2.5 million budget shortfall for the current fiscal year, which ends in September. That’s expected to snowball into a $31 million deficit in fiscal 2026 and $148 million in fiscal 2027.

Although Walsh told council members this week that this year’s deficit is “manageable,” Budget Director Justina Tate warned that the growing shortfall over the following two years could pose a significant problem.

“Our recurring revenue growth is not keeping up with our projected expenses,” Tate told council. “To mitigate this deficit and address the structural imbalance, spending cuts are needed.”

Further complicating matters, the budget is among the first problems a new mayor, not to mention a slew of new council members, will be forced to tackle this fall.

Both mayoral candidates, Rolando Pablos and Gina Ortiz Jones, addressed looming budget issues during a Tuesday debate at San Antonio College. However, they had different priorities on how to distribute dwindling city resources.

Former Texas Secretary of State Pablos, a Republican who brands himself a fiscal conservative, said he would focus on reallocating existing funds so he could bolster spending on the police and the fire departments.

“We have to be a safe community, and for whatever reason, we haven’t delivered on that,” Pablos said. “We need to focus on those priorities and those issues instead of those pet projects that City Council has had as a priority this whole time.”

Jones, a Democrat who managed a $173 billion budget as the Under Secretary of the Air Force, said she’s more concerned about shortfalls exacerbated by President Donald Trump’s ongoing federal funding cuts.

“I think it’s really important that we, informed by the staff’s analysis, understand where we have some uncertainty at this point,” Jones said. “The federal government has said some of that money that we were counting on is not going to come to our community. So, we have to work with the county to understand that just because that money doesn’t come to our community, doesn’t mean those needs go away.”

About $325.5 million of the total revenue, or 8.2%, flowing into San Antonio’s $3.96 billion budget for fiscal 2025 is from federal funding, KSAT reports.

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This article appears in Apr 30 – May 13, 2025.