With Upcoming Budget Cuts, Social Service Nonprofits Ask Council to Preserve Funding

Several Austin City Council members have told the Chronicle in recent weeks that they expect this year’s budget negotiations, which begin in earnest this July, to be the most difficult they’ve ever seen. A central question in the negotiations will be whether to cut spending on social services. 

City Manager T.C. Broadnax advised Council last December that Austin had about $74 million in social services contracts with a variety of local nonprofits. The taxpayer money supports public health, homeless services, food access, and affordable housing, among other things. Broadnax said the city was cutting over $5 million from the contracts after the defeat of the tax rate election called Prop Q, but that he expected to ask Council to eliminate another $16.8 million in the 2027 budget. That budget is now upon us and the struggle over the proposed cuts has begun, with city leaders and nonprofits staking out their positions. 

CMs José Velásquez and Ryan Alter posted a public message on May 29, urging Council to only cut spending on social services as a last resort, saying they “provide life-support for the most vulnerable in our community, but also save money by avoiding more expensive public safety or healthcare costs.” The CMs suggested several ways to guide potential cuts, including requiring any reduction in spending to be accompanied by a statement from city staff describing how the cuts will impact residents. They also recommended that the Council dedicate one of its work sessions to the issue. 

The proposals were seconded by CMs Mike Siegel, Krista Laine, and Zo Qadri. CM Vanessa Fuentes, emerging from an ongoing maternity leave, offered her approval early this week, saying Austin’s nonprofits provide shelter, food, books, diapers, childcare, and more for thousands in the community every day. “They should not be asked to bear the burden of a budgetary shortfall,” she added.  

The proposals from Council members mirror those in a letter to Mayor Kirk Watson and city leaders from One Voice Central Texas, a group representing more than 80 nonprofits, including Equity Action, Mobile Loaves & Fishes, El Buen Samaritano, and the Health Alliance for Austin Musicians. Rosamaria Murillo, CEO of OVCT, wrote in the letter that “our members fear … a sharp, predictable increase in homelessness, food insecurity, unemployment, mental health crises, and corresponding strain on the city’s emergency and crisis-response systems” if social services contracts are cut deeply. 

Murillo also wrote that OVCT has not been able to learn which of their programs face reductions and on what timelines. She noted that if cuts happen, they won’t be felt evenly across the city. “The programs under discussion disproportionately serve residents in the Eastern Crescent,” Murillo said. “In these neighborhoods, community nonprofits are a lifeline to vulnerable children, elderly, and underserved families.”

In the letter, Murillo urged leaders to find cost savings in city operations by reducing overtime budgets and managing staff vacancies. She asked that the city consider how public-safety budgets can be used to support objectives related to public health and suggested that city leaders use some of the money spent on outside consultants to preserve the threatened funding. 

These are strategies that Council embraced during last year’s budget struggles. CM Qadri told us that his priority in the upcoming budget discussions will be to “maintain essential services, protect vulnerable residents, and ensure we make thoughtful investments in Austin’s future.” CM Laine pointed out that most city leaders consider social services spending to be one of those thoughtful investments. “Helping people back on their feet saves us resources in the long-term,” Laine said. “We must prioritize programs that focus on people and their needs, while continuing to streamline city processes.” 

CM Marc Duchen told us the city must try to reduce the duplication of effort from different providers. “We’ve already found instances where some providers can deliver certain specialized services at a fraction of the cost of others,” he said. “This process may be disruptive or even challenging for some organizations, but it’s urgently needed if we want to deliver the best, most vital services while protecting the city’s affordability for the average resident.”

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