Waco city officials see storms in the financial forecast, and the 2026 budget up for a vote Sept. 2 reflects a government preparing for leaner years.
To pay for rising personnel and street rehabilitation costs, city budget writers started early this year looking for deep budget cuts to offset rising personnel and street rehabilitation costs.
Waco City Manager Bradley Ford worked with department heads to identify $32 million in savings without layoffs or tax increases, mostly by axing around 70 vacant positions. The result is a balanced balanced budget of $649.8 million, up just 0.1% or $773,000 more than last year.
But Waco residents will feel the results of some of those tradeoffs.
The Parks and Recreation department saw the deepest cut at $1.1 million. The city will reduce its field trip schedule for summer day camps, close its libraries and community centers an hour earlier on some nights, and end the Cameron Park horse ranger program that began in the 1980s.
While the tax rate remains flat at 75.5 cents per $100 in property value, the average household can expect to pay about $62 more a year due to higher property valuations. Annual fee increases for sewer, water, garbage and streets are estimated at $72 for an average household.
Ford said rising costs and stagnant revenue make this the most difficult budget year since he started with the city of Waco in 2017.
On the expense side, tariffs are expected to add to inflation on infrastructure work. Police and fire pay raises resulting from collective bargaining are eating up more of the budget. Meanwhile, retired city workers are demanding a substantial cost of living adjustment.
On the revenue side, the city is experiencing an unexpected stall in property tax revenue due to weak growth in appraisals, and “federal (grant) dollars are evaporating out of our budget,” Ford said at an August budget meeting.
The proposed cuts will make room for some new spending, including $51 million in combined street and bridge work and a $9.6 million bump in public safety spending.
The budget gives an average 8% raise to civil service police and fire employees, while other employees will get a raise of about 3%.
Of the $1,508 in annual property taxes an average Waco home is expected to pay next year, $621 or 41% will go to police and fire.
“There are ways we probably could have trimmed back that (police and fire) number, but it didn’t feel like the right thing to do,” Ford told the Waco Bridge last week.
He said the pay hike is crucial for retaining police officers at a time where cities such as Dallas are starting recruits at $75,000 a year. Waco PD officers start at $62,000 a year.
Ford and Waco Chief Financial Officer Blu Kostelich see the 2026 budget as a multiyear process to buttress city finances in a period of economic uncertainty. “I think this is a four-year journey and we’re halfway through it, in my mind,” Ford said.
Waco City Council will vote to approve the final budget Sept. 2, the same day as a public hearing on the tax rate.
Balancing services, savings
Most of the $32 million of the cuts in this year’s budget are to recurring expenses, and that’s by design, officials said in a budget work session earlier this month.
Central to the city’s approach was identifying ways to slim down expenses without impeding “the best-in-class services we strive to provide here in town,” Waco Mayor Jim Holmes said.
Kostelich said the reduction in library hours illustrates the city’s approach. Visitation data showed that few patrons visited libraries in the hour before closing, which can be as late as 9 p.m. on weekdays.
The same thinking informed changes proposed for community center hours as well. A table schedule changes can be found here.
Parks and Recreation cuts include an $46,000 less for event and entertainment production; $50,000 less in temporary staffing services; and $237,000 cut from Beautification, Art and Culture (BAC) programming.
“A large portion of the (beautification) budget reduction comes from a vacated manager position and unused special services funds from the prior year,” said Parks and Recreation director Jonathan Cook in a statement to the Waco Bridge. He added that the Corridor Beautification Incentive Program, the Utility Box Art Project and public artwork cleaning and conservation will be unaffected.
Events such as Brazos Nights and Fourth on the Brazos will continue, though parks staff have identified “savings in production and logistics,” he said.
As for summer camp field trips, “visits to higher-cost, ticketed attractions will be reduced, but campers will still experience a variety of local destinations such as the Cameron Park Zoo, Lake Waco Wetlands, and the Waco Mammoth National Monument,” Cook said.
Rethinking nonprofit support
City officials also are targeting reduced operational funding for outside organizations such as the Greater Waco Chamber, Creative Waco and the Historic Waco Foundation, for example. Support would be replaced by a special project fund seeded with $1 million, as well as alternative funding mechanisms such as hotel occupancy taxes. The ultimate goal is to phase out recurring contributions over the course of five years.
“It’s important as a city to fund our nonprofits,” Ford told the council this month. “But we’re funding outside groups about two times what our peer cities are, so we need to pivot from operational support and into project support.”
Prosper Waco, a city-created nonprofit that uses data to improve health education and social mobility in Waco, will see its general fund support drop from more than $200,000 to $80,000 in the proposed budget. However, Prosper Waco is eligible for the special project fund.
“I understand the City’s need to balance fiscal responsibility during a time of economic constraint with their commitment to support the good work being done by nonprofit partners,” Prosper Waco CEO Jessica Attas said in a statement to the Bridge. “While outside agency allocations will be reduced – similar to the budget cuts required within all City departments – I am confident that the City will continue to invest in projects that advance the City’s priorities and the public good.”
Ford described the special project model as an opportunity to engage Waco’s larger ecosystem of nonprofits that have not traditionally received city support.
Future risks, relief
Ford is unequivocal about what Waco’s city budget faces in the near future. Even with the belt tightening embedded in the 2026 budget proposal, “we’re projecting more expenses than revenues starting in 2027 through 2029 and 2030,” he said.
Salaries, particularly at the fire and police departments, continue to grow as a proportion of the budget, while Kostelich anticipates the cost imposed by tariffs to increase as time goes on.
This summer the city saw larger than expected losses in the appraisal protest process. Overall property tax revenues supporting the general fund and its associated debt service increased by $2.8 million, or 2.4%, compared to a 7.1% increase last year.
One big budget item that the city hasn’t yet tackled is raising cost of living adjustments for retired city employee pension plans.
The proposed budget recommends maintaining the current retirement plan at a 30% cost of living adjustment, but at recent council meetings retirees have asked the council to consider boosting that amount to account for inflation.
The most generous alternative under discussion, a 70% cost of living adjustment, would result in a recurring $10.1 million expense to the city budget, likely requiring more severe cuts to city services.
Ford told the Bridge that he believes the city’s financial position will ultimately improve with a growing tax base. He noted investments by large companies such as Graphic Packaging International as well as the impending Downtown Redevelopment Project.
“If the economic winds continue to push, and economic growth is restricted, it’s going to get hard, … but the sun will come out again,” Ford said.
Correction, Aug. 25, 2025, 3:30 p.m. Central: The summary on this article has been corrected to show the budget as $650 million.
