"One Budget Vote” – Clarifying the TRE process
Posted: Mon Jul 21, 2025 9:06 pm
Dear colleagues,
In conversations last week, I heard reference to two different Council actions – “amending the base budget” and “TRE items.” Although I believe most of us are on the same page, I wanted to clarify that under state law, City Council will adopt just one budget. Once Council votes to adopt a budget, the remaining steps are essentially administrative: to adopt a tax rate calculated to sustain that budget, and to call an election if the tax rate calculated exceeds the 3.5% threshold. (I’ve included a link to Texas Tax Code Section 26.07 below, which describes some of the tax rate election procedure.)
This is important for a few reasons:
1. Operationally, this means that if a majority of us agree a TRE is needed, we don't create a base budget that is balanced under a 3.5% tax rate, and then separately authorize additional spending by approving “TRE items.” Instead, we need to spend our time over the next few weeks deciding on what the budget should include and the tax level needed to sustain it.
2. If a TRE is authorized by Council and then fails (a worst-case scenario we should strive to avoid), at that time Council would decide how to reduce the adopted budget in a fair, responsible way. For reference, this is the potential circumstance anticipated by the recently-adopted police contract, Article 20, Section 4 (p. 76), which states, “if the City Council adopts a budget requiring a voter-approval tax rate election (previously called rollback) and the voters do not approve the proposed tax rate, the Chief Financial Officer for the City shall determine any proportionate reduction necessary to meet the funding obligations set forth in this Agreement under the actual implemented budget for that fiscal year.”
3. The “one budget” concept under state law is also key from a voter education perspective. We won’t have multiple budgets floating around. Council will work to adopt a single budget that represents our best efforts to care and provide for this community. If voters approve a TRE, we will implement the adopted budget; and if voters disapprove, we can reduce the budget proportionately as necessary.
I hope this is helpful and look forward to our work ahead.
With respect,
Mike
References:
Texas Tax Code, Section 26.07. TAX CODE CHAPTER 26. ASSESSMENT, https://statutes.capitol.texas.gov/Docs ... /TX.26.htm
COA-APA Meet and Confer Agreement, https://www.austintexas.gov/sites/defau ... .29.24.pdf
In conversations last week, I heard reference to two different Council actions – “amending the base budget” and “TRE items.” Although I believe most of us are on the same page, I wanted to clarify that under state law, City Council will adopt just one budget. Once Council votes to adopt a budget, the remaining steps are essentially administrative: to adopt a tax rate calculated to sustain that budget, and to call an election if the tax rate calculated exceeds the 3.5% threshold. (I’ve included a link to Texas Tax Code Section 26.07 below, which describes some of the tax rate election procedure.)
This is important for a few reasons:
1. Operationally, this means that if a majority of us agree a TRE is needed, we don't create a base budget that is balanced under a 3.5% tax rate, and then separately authorize additional spending by approving “TRE items.” Instead, we need to spend our time over the next few weeks deciding on what the budget should include and the tax level needed to sustain it.
2. If a TRE is authorized by Council and then fails (a worst-case scenario we should strive to avoid), at that time Council would decide how to reduce the adopted budget in a fair, responsible way. For reference, this is the potential circumstance anticipated by the recently-adopted police contract, Article 20, Section 4 (p. 76), which states, “if the City Council adopts a budget requiring a voter-approval tax rate election (previously called rollback) and the voters do not approve the proposed tax rate, the Chief Financial Officer for the City shall determine any proportionate reduction necessary to meet the funding obligations set forth in this Agreement under the actual implemented budget for that fiscal year.”
3. The “one budget” concept under state law is also key from a voter education perspective. We won’t have multiple budgets floating around. Council will work to adopt a single budget that represents our best efforts to care and provide for this community. If voters approve a TRE, we will implement the adopted budget; and if voters disapprove, we can reduce the budget proportionately as necessary.
I hope this is helpful and look forward to our work ahead.
With respect,
Mike
References:
Texas Tax Code, Section 26.07. TAX CODE CHAPTER 26. ASSESSMENT, https://statutes.capitol.texas.gov/Docs ... /TX.26.htm
COA-APA Meet and Confer Agreement, https://www.austintexas.gov/sites/defau ... .29.24.pdf