The San Marcos City Council adopted the budget and property tax rate for fiscal year 2026-27, addressing a projected $4 million shortfall and approving a tax rate above the no-new-revenue rate.

The big picture: The council approved a total operating budget of $406.56 million, a 9.5% increase from FY 2025-26, during a Sept. 15 council meeting. The city faced a forecasted $4 million shortfall at the beginning of the budget planning process, according to agenda documents.

Additionally, the city budgeted $1.4 million for the newly established Emergency Medical Services department. City staff addressed the shortfall and funding needs and presented the council with a balanced budget, which the council subsequently adopted.

Also of note: The council adopted a property tax rate of $0.6515 per $100 of taxable value. While the tax rate remains the same as in FY 2025-26, the rate has a 2.5% increase when compared to the no-new-revenue rate of $0.635574 per $100 of taxable value, according to agenda documents.

A new Olive Garden is set to begin construction in 2027 on I-35 in Kyle.

The chain has over 900 restaurant locations and is known for serving Italian food, with entrees including chicken Alfredo, lasagna classico and chicken parmigiana. Soups, salads, desserts and breadsticks can also be found on the menu, alongside alcoholic and nonalcoholic beverages.

The framework: Olive Garden is part of the Darden restaurant group, which oversees several large brands including LongHorn Steakhouse, Chuy's and Cheddar's Scratch Kitchen. A Darden spokesperson confirmed a lease has been signed for the new location but said since construction has not yet started, they don't have any details to share as of press time.

• 19865 I-35 frontage road, Kyle

Check out the latest transportation project updates across the Austin metro.

Austin Transit Partnership approves lease for new downtown office: The ATP board approved a $13.5 million agreement to lease office space for 48 months at 203 Colorado St.—the agency's current office—as well as space next door at 201 Colorado St. Officials said this will help as the agency anticipates growing as Project Connect plans move forward.

Blakey Lane plan advances with Jessica Place connection: Bastrop is moving ahead with a Blakey Lane extension intended to connect the Sendero and Burleson Crossing shopping areas with businesses to the east. The plan has drawn opposition from Riverside Grove residents over opening a subdivision street called Jessica Place to through traffic.

State invests approximately $1.5B in Austin-area roadway improvements: Governor Greg Abbott and the Texas Department of Transportation recently announced a 10-year transportation plan that will invest almost $140 billion in roadway improvements across the state. The funding includes $95 billion for projects across the state and $43 billion for development and routine maintenance.

Last fall, Gov. Greg Abbott deemed Texas "the epicenter of AI development" during an event about Google's data center investments in the state.

Since making that remark, the Republican governor has issued several directives aimed at regulating AI-powered data centers. Meanwhile, state agencies are expanding their use of artificial intelligence in government services.

The overview: At the state level, one of the primary uses of artificial intelligence is to improve government efficiency, said Tony Sauerhoff, who leads the Texas Department of Information Resources.

Down the road, that will likely mean reducing the number of staff members at state agencies, Sauerhoff said, noting that agency leaders are being "intentional" about those changes.

Zooming in: When asked which state agencies will be most impacted by AI in the coming years, Sauerhoff pointed to the Texas Department of Transportation.

TxDOT uses artificial intelligence in a variety of forms, including to analyze transportation infrastructure, determine which construction projects should be prioritized, optimize road safety plans and manage the flow of traffic, according to its AI strategic plan.