During the recent Austin City Council Budget Work Session, city officials outlined key components of the proposed budget for fiscal year 2026, highlighting significant growth in utility and aviation departments that will shape the city's financial landscape.

Austin Energy and Austin Water continue to dominate the budget, accounting for 43% of the total budget, while the aviation sector has expanded to 7%. The general fund, which supports essential city services, remains stable at 23% of the overall budget. Internal services, which include critical operations like the city manager's office and human resources, also hold steady at 23%.

A notable aspect of the budget discussion was the management of health insurance costs. The city's contribution to employee health insurance will remain flat for fiscal year 2026, with a projected 5% increase anticipated for fiscal year 2027. Employee premiums are expected to stay the same, reflecting efforts to stabilize the employee benefits fund and avoid drastic fluctuations in funding.

Wage increases were another focal point, with a proposed 4% raise for civilian employees in both fiscal years 2026 and 2027. However, to balance the budget for fiscal year 2027, no further increases are projected for that year. The living wage will rise to $22.05, based on the Consumer Price Index, ensuring that it aligns with broader wage increases while remaining manageable for the city.

The council also discussed ongoing efforts to address long-term vacancies within city departments. A systematic review has led to the elimination of positions that have remained unfilled for over two years, significantly reducing the number of long-vacant roles from around 140 to just eight this fiscal year.

As the proposed budget for fiscal year 2026 stands at $1.5 billion, city officials emphasized the importance of these financial decisions in supporting community needs and maintaining essential services. The discussions set the stage for further deliberations as the city prepares to finalize its budget, aiming to balance growth with fiscal responsibility.