Austin City Council Approves $6.6 Billion Municipal Budget and Initiates AI Data Center Water Reviews

AUSTIN, TX — Austin City Council voted 9–2 to adopt a record $6.6 billion municipal budget for the 2026–2027 fiscal year, pairing municipal utility infrastructure investments with new regulatory guidelines governing commercial data centers.

Protecting Municipal Water and Power Infrastructure

The approved budget resolution directs Austin Water and Austin Energy to draft municipal code amendments requiring hyperscale data center operators to utilize reclaimed wastewater closed-loop cooling systems. The measure aims to insulate Central Texas water reservoirs from excessive industrial depletion during summer drought conditions.

Council members affirmed that Austin must balance rapid technology sector expansion with long-term ecological and ratepayer protections.

Taxpayer Impact and Public Safety Allocations

The budget includes a modest 3.5% property tax rate increase to fund 80 additional emergency medical service (EMS) paramedics and permanent supportive housing initiatives.

Dissenting council members argued that property tax increases place unnecessary burdens on working homeowners facing elevated appraisal values.

Rulemaking Timeline

Austin Water will present the formal data center water-efficiency ordinance to council in November 2026.