M
ayor Kirk Watson recently addressed the Real Estate Council of Austin, highlighting several "budget asteroids" that could impact the city due to upcoming state and federal policy decisions. These include potential tariffs on international goods, a possible 20% increase in bond costs if a federal tax exemption is eliminated, and a new state law requiring two-thirds voter approval for local tax increases.

    Watson emphasized that these changes would have significant economic implications, including increased costs for infrastructure projects and municipal utility districts. He expressed concern about the impact on affordable housing, saying it may become unfeasible under these circumstances. The proposed airport expansion, which could cost an additional $1 billion, is also at risk.

    The city must also manage the end of federal American Rescue Plan spending, which has ongoing operational costs for homelessness services. With a significant portion of the General Fund budget dedicated to police, fire, and emergency services, some programs may need to be restructured or eliminated.

    Despite these challenges, Watson highlighted progress on housing reform, including the HOME initiative and simplified site plan review processes. He also noted that the recent five-year contract with Austin police could help address longstanding hiring gaps at the department.