🟪 City audit: Contracted nonprofits often missed service goals while receiving full payment (Community Impact)

🟪 Austin ISD ends partnership officials had hoped would avert state takeover (Austin American-Statesman)

🟪 Liberty Hill taps developer to help steward downtown revitalization (Austin American-Statesman)

🟪 Small Texas town weighs tougher data center rules amid AI growth (Austin American-Statesman)

🟪 Texas’ bite of the microchip industry is growing thanks to public grants, incentives (Texas Tribune)

🟪 In search of fraud, Huffines plans to shift auditors at Texas Comptroller's Office from auditing businesses to government (CBS News)

🟪 They were charged with assaulting ICE agents. The cases are crumbling. (New York Times)

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🏛️ MEMO: Fiscal Year 2026-2027 Budget Adoption Timeline

🏛️ VIDEO: Budget Meeting of the Austin City Council (7.16.26)

💰 Review the Fiscal Year 2026-27 budget documents here

✅ City audit: Contracted nonprofits often missed service goals while receiving full payment (Community Impact)

Nonprofits contracted by the city often failed to provide agreed upon services or results, while Austin generally paid their expenses in full regardless of whether performance targets were met, a new internal audit found.

Austin officials stressed those findings may not apply to all local organizations contracted for family and social services, on which the city spent roughly $100 million annually, and instead reflect faults with government oversight. City management agreed to process reforms that are now in the works.

“This is first and foremost about the people we’re trying to serve, but it is really an indictment of our ability to manage that service, not to paint a broad brush and say every one of our partners is doing a bad job," council member Ryan Alter said.

The audit was released as millions of dollars in cuts to social services spending are proposed in the city's next budget plan… 🟪 (READ MORE)

✅ Austin ISD ends partnership officials had hoped would avert state takeover (Austin American-Statesman)

Weeks before the school year begins, Austin Independent School District will end a nonprofit partnership that officials had hoped would help the district stave off looming state intervention. 

The district’s Monday announcement comes after the Texas Education Agency in May rejected Austin ISD’s proposal to partner with a nonprofit to buy more time for three chronically under-performing North Austin middle schools to improve academics. TEA’s May rejection tipped the district closer to a possible state takeover.

The three schools have long struggled on the state’s A-F accountability system, which rates each campus largely based on results from the State of Texas Assessments of Academic Readiness, or STAAR, tests. Each campus has received four consecutive F grades. A fifth — which could be announced in mid-August — could trigger a takeover of the entire district.

The change represents more upheaval for students and educators at Dobie, Burnet and Webb middle schools, which last year underwent significant changes to staffing, schedules and curriculum. Trustees had approved an agreement in March with the nonprofit Texas Council for International Studies in hopes of leveraging a state law that allows districts to “pause” accountability consequences. The law, Senate Bill 1882, also gives campuses more money per student. 

Instead, Austin ISD will operate the three schools next year… 🟪 (READ MORE)

✅ Liberty Hill taps developer to help steward downtown revitalization (Austin American-Statesman)

A booming suburb northwest of Austin has tapped a company to help with the revitalization of its downtown.

Griffin Swinerton LLC on July 8 was approved by the Liberty Hill Council for a $1.5 million contract to serve as the owner's representative to help steward the buildout of its downtown district. The city had earlier this year solicited bids for the contract through a request for qualifications.

The developer – a joint venture between California construction management firm Griffin Structures Inc. and construction company Swinerton Inc. – will act as an extension of city staff. Specifically, it will be responsible for doing things like implementing a 2024 Downtown Strategic Master Plan, evaluating public facility needs, evaluating the market for financing options, performing outreach workshops with the public, providing an estimate on costs and more.

Griffin Swinerton Executive Vice President Korin Crawford billed his company as a "values-based organization" that has done $1.2 billion worth of similar projects, including $530 million in Texas. The company was also tapped to steward the buildout of Pflugerville's Downtown East project… 🟪 (READ MORE)

✅ Small Texas town weighs tougher data center rules amid AI growth (Austin American-Statesman)

Another small Texas town has joined the growing number of communities considering action as data centers expand across the region and draw scrutiny from lawmakers. Elected officials in Lockhart, the city 30 miles south of Austin known as the “Barbecue Capital of Texas,” have directed city staff to develop “very strict standards” for the resource-heavy developments. City Council members said a data center ban, though preferred, could expose the city to legal challenges.

“I would prefer an outright ban but I don’t know that it’s the best choice for us because of the possibility of years and years of litigation and excessive expense for the city,” Council Member Juan Mendoza said Thursday during a special meeting. “I would like to see what the city can come up with as far as guardrails — very strong guardrails that make it almost impossible for any of these centers to want to come into Lockhart.”

The move comes after widespread uproar over the growth of data centers in the region. At least five data centers are planned or under construction in Caldwell County, though all are outside Lockhart. Officials have not yet approved any within city limits. The county, with an estimated population of 55,150, is experiencing many of the same growth pressures as other communities in the Austin region. “We are the county seat for Caldwell County so it’s up to us to lead by example,” Lockhart resident Jesús Pantel told the council. Lockhart joins several local governments studying the potential impacts of data centers and looking for ways to slow the industry’s growth.

As demand for artificial intelligence grows, Texas has become the country’s fastest-growing data center market, with developers drawn by affordable open land, incentives and access to energy. The state stands to gain billions of dollars in investment from such development, as well as thousands of temporary construction jobs. But local and state officials have raised concerns about the potential strains data centers could place on infrastructure in a state that’s already facing water shortages and whose power grid has struggled to keep up with growth… 🟪 (READ MORE)

✅ Texas’ bite of the microchip industry is growing thanks to public grants, incentives (Texas Tribune)

California might have the Silicon Valley, but Texas is the silicon state.

Texas leads the nation in exports of semiconductor chips, the small pieces that form the building blocks of all modern electronics, and the industry is currently experiencing a boom.

“It seems unprecedented relative to what I have seen since I got into the business in 1998,” said Steve Putna, director of Texas A&M’s Semiconductor Institute. “I think this ecosystem has been significantly replenished as a result of all the incentive funding we’ve seen.”

Federal investment and the flurry of data centers being built in Texas and across the country have expanded the industry even more.

In recent months, a series of new or expanded semiconductor fabrication plants, or “fabs,” have begun operating or been announced in the Lone Star State, including the launch of Texas Instruments’ $40 billion semiconductor facility in Sherman late last year, Nvidia and Winstrom Corporation’s plans for two facilities in north Fort Worth and Elon Musk’s massive “Terafab” semiconductor megafacility proposed in Grimes County.

There are currently a total of 57 individual semiconductor facilities in the state, representing more than 47,000 workers across semiconductor fabrication plants, materials manufacturing and research and development, according to the Semiconductor Industry Association… 🟪 (READ MORE)

✅ In search of fraud, Huffines plans to shift auditors at Texas Comptroller's Office from auditing businesses to government (CBS News)

Don Huffines told CBS News Texas that when he becomes the Texas Comptroller on August 1, he plans to make some changes at the office. 

"I'm going to be doing a lot of shifting with my team," said Huffines. "I have over 600 auditors down there, and we're going to be increasing that staff. I'm shifting a lot of my auditors over to auditing government from auditing businesses currently for revenue." 

When asked if he will still want to make sure that companies aren't defrauding the state, Huffines said, "Of course. Yes. It's a real delicate balance. It really is. If you owe your tax, we want to make sure you're paying that tax." 

Governor Greg Abbott appointed Huffines to the position after the current Acting Comptroller, Kelly Hancock, announced he would resign effective July 31st. Huffines became the Republican nominee for the job in November after defeating Hancock and two other candidates in the March primary. Huffines faces Democrat Sarah Eckhardt, a State Senator from Austin, in November… 🟪 (READ MORE)

✅ Dallas City Hall’s fate, mayor’s power could help shape the 2027 race (Dallas Morning News)

Michael Hinojosa chose City Hall as the backdrop last week for launching his campaign for mayor. But he stopped short of saying whether Dallas should remain in the I.M. Pei-designed building. The former Dallas ISD superintendent said city leaders will decide its fate before the next mayor takes office after the November 2027 election. He said he favors an approach that is “efficient” and “honors the past.” “They haven’t put much money in it, and you can’t talk your way out of things,” Hinojosa said. He pointed to The Academic, an apartment complex created from Dallas ISD’s former 70-year-old administration building on Ross Avenue, as an example of how City Hall could be repurposed.

Dallas Council Member Cara Mendelsohn, who opposes relocating City Hall, said in a social media post that “not taking a position” makes you “a non-viable candidate in 2027.” “There will be plenty more candidates for mayor and the City Council seats,” she wrote. “Let's see what they do.” The debate is particularly relevant for potential mayoral contenders already on the council. They will help determine what happens to the building and be saddled with the political consequences. The next mayor could inherit the challenge of funding millions of dollars in needed repairs or managing a move, along with facing tensions from whichever side loses. That makes the City Hall fight a test of how candidates would balance fiscal discipline, downtown redevelopment and some residents’ attachment to a civic landmark.

Personal injury lawyer Ben Abbott, who is considering a run, has begun airing TV ads that present him as a civic leader who will “show up, listen and get results.” Council members Gay Donnell Willis, Chad West and Paula Blackmon, businesswoman Lynn McBee and developer and philanthropist Peter Brodsky are among those mentioned as potential contenders. The office itself also could change before voters choose the next mayor. Some local leaders are discussing an effort to put a strong-mayor proposal before voters in May 2027. Details remain unsettled, but that could shift some executive authority from the city manager to the elected mayor. The outcome could determine not only how much power Dallas’ next mayor will have, but also who decides to run for the job… 🟪 (READ MORE)

✅ James Talarico pledges $25 million to win over Black voters in U.S. Senate campaign (Houston Public Radio)

State Rep. James Talarico, D-Austin, has pledged to spend $25 million to mobilize Black voters on behalf of his campaign for the U.S. Senate this fall. Most polling shows Talarico in a statistical dead heat against his Republican opponent, Texas Attorney General Ken Paxton.

Brandon Rottinghaus, a political science professor at the University of Houston, said the investment is much larger than what Texas typically sees from statewide Democratic campaigns in terms of efforts to mobilize the Black vote. Garnering the support of Black Texans figures to be critical for Talarico as he seeks to become the first Democrat to win a statewide election in more than 30 years.

"This clearly signals the Talarico campaign is worried about making sure the Black vote comes out," Rottinghaus said. "The Black vote is central to Democratic success in Texas, and historically without a sizable turnout among Black voters, Democrats have not done well."

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Talarico spoke at a town hall Sunday at the Kingdom Builders’ Center in southwest Houston, where he was joined by Black elected officials at the municipal, state and federal levels. Talarico said the spending pledge — which his campaign asserts is a record for Texas in terms of trying to mobilize the Black vote — was the start of greater engagement, not the end… 🟪 (READ MORE)

✅ Ken Paxton scrambles to win back the GOP’s big-dollar donors (Wall Street Journal)

A day after Texas Attorney General Ken Paxton defeated longtime Sen. John Cornyn for the party’s Senate nomination, his campaign called billionaire businessman Bob Rowling. Rowling, who had contributed more than $750,000 to groups supporting Cornyn, is one of the high-dollar Republican donors who could be key to Paxton’s efforts in a competitive race. But Rowling, a onetime supporter of Paxton, had been turned off by his alleged extramarital affairs and was emotional over his drubbing of Cornyn, he said. He initially declined to help. Then Rowling got a call from Sen. Ted Cruz, who asked him to meet with Paxton. Rowling said he had begun to consider whether Democratic opponent James Talarico was a concerning enough threat for him to open his wallet again.

He ended up taking a meeting with Paxton and Cruz to hear them out. Rowling’s hesitation highlights the bind confronting a bloc of deep-pocketed Texans weighing how involved to get in the race. Many can’t stomach Paxton—a populist firebrand dogged by legal and ethical scandals and known for targeting corporate interests. But with control of the Senate in the balance and a well-funded Democrat on the other side, some are deciding they can’t afford to sit this one out. Paxton’s success hinges, in part, on winning them back. He has his work cut out for him.

After Paxton’s nomination, donors at one major Republican fundraising organization asked that their money not go to him—because his office had sued so many of them, and because they feared he could misuse it, according to a person familiar with the conversations. Paxton will need all the support he can get. Texas is a notoriously expensive state for political campaigns: It has 20 media markets and 19 million registered voters spread across two time zones. Talarico, buoyed by a Democratic base desperate for its first statewide win since 1994, has been a fundraising powerhouse, reporting $27 million in the first quarter of the year and $30 million in the second… 🟪 (READ MORE)

✅ ‘A better way to be relevant’: Greens embrace data center fight (Poltico)

The nation’s biggest green groups have joined the fray over data centers — and they’re starting to notch some victories after 18 months of stinging environmental setbacks under the Trump administration. Groups including the Sierra Club, the Natural Resources Defense Council, Earthjustice, and Food and Water Watch are ramping up national campaigns, activating volunteers in states and providing support for local fights against the massive artificial intelligence facilities that are spreading across the country. The nation’s biggest green groups have joined the fray over data centers — and they’re starting to notch some victories after 18 months of stinging environmental setbacks under the Trump administration.

Groups including the Sierra Club, the Natural Resources Defense Council, Earthjustice, and Food and Water Watch are ramping up national campaigns, activating volunteers in states and providing support for local fights against the massive artificial intelligence facilities that are spreading across the country. Their strategy is aimed at engaging with voters where they are most focused, and it could help generate new enthusiasm — as well as a stream of fresh funding — from progressive backers who have been far less aggressive in fighting for environmental causes than they were during the first Trump administration.

“There is not a better way to be relevant that is as prevalent as data centers,” said Jane Kleeb, founder and director of BOLD Alliance, which got its start organizing rural landowners against the Keystone XL oil pipeline. “After doing this work for 20 years, it is easier to mobilize communities to block something than it is to build something.” Since President Donald Trump returned to office, the environmental movement has suffered a series of losses: a weakening of air and water pollution laws for factories and vehicles, eradication of climate change rules, and a sharp turn away from clean energy sources and toward fossil fuels.

Now, opposition to the data center construction boom is offering a new opportunity — and green groups lodged a big win on Tuesday when Democratic New York Gov. Kathy Hochul froze most new large-scale data center construction in the state, yielding to calls to pause projects until the state can establish standards around their development. That will enable the environmental groups to weigh in on new energy sources in the state and potentially head off the expansion of fossil fuel power sources that would increase climate change-causing carbon emissions and other pollution… 🟪 (READ MORE)