Austin’s Financial Hole Deepens, Earning a “D” Grade

Austin’s financial condition worsened in fiscal year 2023, with the city facing a $3.9 billion shortfall. This equates to a Taxpayer Burden™ of $11,700, earning Austin a “D” grade and placing it among the nation’s “Sinkhole Cities,” according to Truth in Accounting’s latest report.

While Austin increased its capital investments by $1.3 billion—enhancing public infrastructure—this limited available funds to cover outstanding debts. The city’s financial challenges were compounded by a $1.9 billion rise in pension liabilities, driven by unrealized investment losses exceeding 11%. Additionally, a cooling housing market led to a 10.5% drop in median home prices, which could negatively impact future property tax revenues, a key funding source for the city.
Key findings from the report include:

• Austin had $5.9 billion available to pay $9.8 billion in bills.
• The city’s financial shortfall reached $3.9 billion, translating to an $11,700 burden per taxpayer.
• Pension liabilities increased by $1.9 billion, adding to long-term financial strain.

With rising pension debt and declining property values affecting revenues, Austin must carefully manage its finances to prevent further fiscal deterioration. Strategic planning will be necessary to balance infrastructure investments with financial stability.

For those interested in a deeper dive into Austin’s finances—and how it compares to other major U.S. cities—you can read the full Financial State of the Cities 2025 report here.