Austin Faces $33M Budget Gap While Needing $101M for Homelessness Crisis Response

Austin's homeless population is approaching 5,000, prompting city officials to announce a need for nearly $101 million to maintain shelters, housing, and services in the upcoming year. This comes at a time when the city is facing a significant budget deficit of $33 million.

David Gray, the city’s homeless strategy officer, informed council members on Monday that the issue of homelessness is currently at a critical juncture. The estimate presented incorporates $33 million from community partners; however, city resources are expected to cover a significant portion of the funding shortfall, potentially impacting taxpayers.

Council Member Ryan Alter stated, “There is only one method to get that money.” "Taxpayers will be called upon to invest in our community and prioritize this initiative."

Last year, the city allocated over $30 million. Still, Gray cautioned that the funding requirements are set to more than double to enhance shelter beds, permanent housing, and outreach initiatives. Challenges arise. Federal COVID-era funds amounting to $15.65 million, which have been supporting various programs, are set to expire this year.

Austin is facing a budget shortfall due to stagnant sales tax growth, limitations on property tax revenue, and the conclusion of funding from the American Rescue Plan. The city faces limited alternatives as it seeks to enhance public safety, a sector that currently accounts for 63% of the budget.

Local nonprofits, including Caritas of Austin, have called on the city to ensure stable funding sources. “The lack of sustainable and predictable funding significantly hampers our community’s ability to strategize effectively,” stated Caritas CEO Jo Kathryn Quinn.

City leaders highlighted advancements despite facing numerous challenges. Austin has set a goal to introduce 1,000 new housing units by 2027 and enhance emergency shelters and rental assistance initiatives. However, maintaining that momentum is expected to necessitate either tax increases or a bond approved by voters.

Discussions regarding the budget are set to begin in July, with a decisive vote anticipated in August.