Bexar County leaders have doled out most of the roughly $389 million they received in federal pandemic relief to create a county public health department, fund mental health services in schools, start new domestic violence prevention programs — among a long list of other initiatives aimed at mitigating the effects of COVID-19.
Now that nearly all of the money has been allocated, and growth in the county’s main revenue source is slowing down, the county’s elected leaders are barreling toward some tough conversations about how to rein in their spending.
“Writ large, you funded a lot of things, both one-time and recurring [with the federal pandemic relief],” County Manager David Smith told commissioners this week. “We’ll have to look at all of them.”
On Tuesday Smith presented a budget proposal for the 2025 fiscal year that recommends plowing the last of the unallocated American Rescue Plan Act (ARPA) dollars into the county’s general fund as revenue replacement — rather than using it for new one-time expenses, as commissioners had previously discussed.
County leaders would still need to either cut their spending or grow the amount of money they’re taking in by another $25 million in the coming years to avoid a financial shortfall in not-so-distant future, according to Smith.
“We will still have work to do — even if you adopt the budget I’ve recommended — to identify recurring savings or recurring revenue in the upcoming years,” Smith told commissioners.
Smith noted that commissioners will likely want to keep some ARPA-funded initiatives, like a specialized law enforcement team to respond in mental health crisis situations, which would need to be offset in future years.
But if the county were to continue funding all of its existing programs, “this is what we forecast the result would look like, starting in 2028,” Smith said, while gesturing to a chart that showed “funds required” shooting up, while “funds available” declined rapidly after 2026, when APRA money must be completely spent.
“What Commissioner [Grant] Moody (Pct. 3) has referred to as the ‘ARPA cliff’ starts to bite, and we would have to do something, or else we would be below our required fund balance,” Smith said.
Bexar County’s 2025 budget proposal
Like the City of San Antonio, which is facing its own budget woes, this year Bexar County plans to break its decade-long streak of lowering its tax rate and implementing new tax exemptions for homeowners.
It plans to keep its tax rate the same as 2024.
That decision comes as Smith said the county’s tax base, which is now roughly $240 billion, isn’t growing as quickly as in past years.
“The rate of increase, as we’ve discussed before, has been dropping from year to year,” Smith said. “Four years ago it was 13%, the year after that it was 9%, then 7.5% and now 4.5%. … So that’s a trend we will be watching closely.”
The proposed budget for fiscal year 2025 comes in at $2.8 billion, a decrease from last year’s $2.95 billion budget, which Smith chalked up to the completion of some major capital projects and the winding down of federal pandemic relief.
“The bulk of your expenditures are in operating expenditures,” Smith told commissioners. “But we also carry a large capital projects budget, and we also have a large carry forward of currently-funded capital projects that will not be finished before this budget is over.”
In addition to the spending cuts, Smith recommended in July that the county not take on any new debt for several years, and instead use money it’s already borrowed to finish up capital projects that are currently in the works.
Commissioners are divided on whether they want to take that advice. A work session aimed at reviewing major capital projects this month ended with little clarity about their willingness to cull the project list.
A new era in county budgeting
Getting commissioners to agree on shared spending priorities is a daunting task — so much so that last year, the county didn’t even try.
Instead, the county divided money for high-priority infrastructure projects evenly between the precincts.
Smith said that was what the majority of the commissioners wanted, but it drew political backlash and threats of a lawsuit from Commissioner Tommy Calvert (Pct. 4), who said the process wasn’t fair to historically underserved parts of the county.
Bexar County Judge Peter Sakai, who is now in his second year as judge, told the San Antonio Report he agrees the court needs to be making the county’s spending decisions as a group. They’ll begin those conversations with a work session on Thursday afternoon.
“My role as county judge, I believe, is to bring all five commissioners to consensus,” he told the San Antonio Report of his plans for this year’s budget. “It will be up to each commissioner to argue for those projects or expenditures in their precinct… Each commissioner is going to have to give and take.”
Sakai also led the commissioners and county department leaders on a budget town hall circuit this month to solicit feedback from the community.
“I want the public to understand that we’re constantly taking input of what the priorities are and what projects we should look at, what type of debt we should incur and what we should not incur,” Sakai said of that approach.
Increases to law enforcement
Among the most contentious issues in recent county budgets has been funding for law enforcement.
As development has surged in the county’s unincorporated parts, which aren’t served by the San Antonio Police Department, the county has been under intense pressure to add more sheriff’s deputies and improve response rates for emergency calls.
But the county’s budget staff been hesitant to fund additional positions in the past two years, because the sheriff’s office couldn’t fill positions that were already open.
This year the sheriff’s office has filled all of its patrol vacancies, and it’s getting closer to filling openings at the jail.
Still, the county’s proposed budget accounts for about half of the positions the sheriff’s office requested.
It includes 12 deputy sheriff positions and three sergeant positions to staff two new patrol districts, as well as resources to staff a new program aimed at targeting repeat, violent offenders who have active warrants.
The county is also putting aside money for two additional deputy constables in each precinct, and four new courts that it will ask the state legislature to create next year.