$7 Million Gap Forecasted for 2026
Corpus Christi officials revealed a projected $7 million shortfall in the 2026 fiscal year budget, signaling potential financial turbulence ahead. This announcement came during a budget overview presentation on April 29, launching the months-long process of shaping a formal proposal for City Council approval.
City staff estimate the deficit stems from the gap between projected revenues and expenses—assuming, however, the property tax rate stays at 60 cents.
Where the Numbers Stand
Early estimates show $341.5 million in revenue and $351.7 million in spending, leaving a $7 million gap—equal to full department budgets. “This is not an insignificant number,” stressed City Manager Peter Zanoni.
Since most cuts already happened, only core services remain. If unaddressed, the shortfall could reduce operations in libraries, animal care, and code compliance.
Transitioning from Projections to Action
The Corpus Christi Budget Shortfall could shift depending on upcoming property valuations. Officials will release preliminary values on April 30, which may alter current assumptions. However, certified values won’t be available until late July, meaning the outlook could still change — for better or worse.
In the meantime, the city has already begun internal efforts to identify savings. Since February, each department has been carefully reviewing its operations to uncover cost-cutting opportunities and boost efficiency. As Amy Cowley, Director of Management and Budget, explained, the goal is to “really start looking critically at their operations to look for efficiencies or opportunities for savings.”
This proactive approach shows that city leaders take the Corpus Christi Budget Shortfall seriously and remain committed to responsible, forward-looking solutions.
Funding Pressures and Spending Mandates
The city also faces new mandatory costs heading into 2026. These include merit-based raises and contractual obligations tied to public safety collective bargaining agreements. These new costs and the projected shortfall are putting significant pressure on the city’s budget.
Further complicating the situation, property tax revenue — the city’s largest single source, contributing about 30% to the general fund — will likely be softened due to increases in homestead exemptions and senior or disabled exemptions despite an annual gain of about $641 million in new value on the tax rolls.
Potential Cuts and Revenue Strategies
Zanoni warned that the city would reduce public services if it couldn’t find savings elsewhere. The options considered are cutting library hours, scaling code enforcement, and reducing park amenities.
On the revenue side, the city is evaluating fee adjustments. Departments like solid waste and parks and recreation already bring in revenue, but officials are now examining whether these charges reflect the actual cost of service delivery. Increases in those fees could help close the gap.
Additionally, staff reductions are on the table, as personnel expenses account for nearly 80% of the city’s budget. Zanoni emphasized that the city will first look at vacant positions and will aim to relocate current employees rather than displace them if cuts are necessary.
“That’s a big goal of any budget-balancing exercise — to ensure our current workforce is not displaced,” he explained.
Despite possible cuts, this commitment to protecting employees should reassure them and reinforce their value to the city.
What Comes Next?
The 2026 fiscal year begins on October 1, and the City Council plans to adopt a balanced budget by September. This process involves a series of budget presentations, public hearings, and discussions among council members. Meanwhile, the public will start seeing presentations of the proposed budget as early as July.
Notably, this year’s projected gap is smaller than last year’s $9 million shortfall, which led to library hour reductions, among other cost-saving measures.
Despite budget challenges, city leaders stay focused on sustainable solutions that reduce service cuts and safeguard staff from potential impacts.