Proposed Austin budget raises taxes, fees $178 for typical homeowner


Highlights

An uncertain city budget brings out anger at state leaders.

Mayor Steve Adler and Council Member Ellen Troxclair spar over city taxes.

The rollout of Austin’s proposed 2018 budget devolved into a debate Wednesday over the state’s handling of school finance as City Council members face a tight spending plan with little wiggle room for new initiatives.

The staff-proposed budget draft includes an 8 percent increase in property tax revenue, the maximum allowed without potentially triggering a rollback election. That hike would add $118 to the annual bill of a house worth $305,510, the median for the area. With increases to garbage, anti-littering and Austin Energy costs, the average homeowner would pay $178 total in extra fees and taxes next year.

Unlike the past two years, this budget brings no increase in the city’s homestead exemption, which currently knocks 8 percent off a home’s value for the purposes of taxation.

The proposed budget includes a $1 billion general fund and $3.9 billion in total spending, including the general fund and all utilities and enterprise funds. It would boost funding to more quickly process development permits, but otherwise makes few changes to existing expenditures — bypassing social service funding increases council members have requested.

Austin’s Open Budget: See how funds are allocated

An ‘Alice in Wonderland’ world

This budget, for the fiscal year beginning Oct. 1, comes at a particularly uncertain time. Negotiations are underway on a labor contract that would outline the next several years of spending on Austin police and firefighters, leading budget officers to be intentionally vague on how much they plan to spend on them. And the Legislature is meeting in a special session that includes consideration of a lower cap on property tax raisesnew restrictions on municipal annexation and deadlines for local governments to process permits.

The Legislature’s property tax proposal — which would lower the threshold for potentially triggering an election to raise property taxes from 8 percent to 5 percent — has caused particular consternation at City Hall. Austin has raised tax bills by nearly 8 percent in seven of the last 10 years. Austin leaders have argued the increase is necessary for city services to keep pace with growth, while detractors argue the growth should be plenty to bring in cash without tax increases.

Staff members emphasized Wednesday that city taxes make up only about a fifth of a homeowner’s tax bill. About 55 percent is school district taxes — a large portion of which go back to the state through a recapture system meant to help pay for schools in poorer areas.

The portion of the average homeowner’s payment to the Austin school district that goes back to the state has increased from $355 to $1,378 in four years, and next year will exceed the total city of Austin tax bill, staffers estimated. Charts on the subject led to a passionate monologue from Mayor Steve Adler and a lengthy back-and-forth with conservative Council Member Ellen Troxclair, which two other council members grabbed popcorn to watch.

“The recent increases by the state, of property taxes, has been extreme,” Adler said. “Yet in this ‘Alice in Wonderland’ world, state leaders are blaming local governments for their property tax increases.”

Troxclair didn’t defend the state’s school financing system, but said city taxes needed to stop rising.

“This city has chosen to adopt nearly the maximum tax (increase) of 8 percent year after year,” she said. “So I have a hard time believing anything would change, regardless of whether this legislation were pending.”

Higher fees, faster permits

Most Austin city departments will keep their spending levels the same for 2018, with the addition of 2.5 percent cost-of-living raises for civilian employees, said interim City Manager Elaine Hart.

The biggest proposed increases come in Development Services, whose budget would grow from $37.5 million this year to $58.4 million next year, mostly due to increasing staff to handle permits more quickly after the 2015 Zucker Report documented lengthy permit delays and other problems. That office will also take over environmental reviews from the Watershed Protection Department. All but $5 million of the department’s budget will be covered by its own fees, not taxes.

Austin Energy, which touted cutting rates for all customers last year, isn’t increasing base rates. But customers will see a cost increase due to a power supply adjustment and regulatory charges increasing, staffers said.

The budget also adds 27 positions to the Austin Code Department to expand enforcement hours, particularly to respond to complaints about short-term rentals. It plans for increased costs associated with operation of the new Central Library, set to open during the fiscal year, and funding for new city electric car charging stations and more Austin Convention Center employees.

It leaves only $5 million for City Council members to add new programs — not even enough to cover one of the several ideas council has floated, such as adding fire stations or substantially increasing health programs.

Council Members Delia Garza, Kathie Tovo and Ann Kitchen expressed frustration that there isn’t more money allocated to Health and Human Services programs, despite numerous council resolutions to increase funding. Council Members Ora Houston and Alison Alter worried about unknown state and federal grant shifts and wondered if money should be held as a buffer.

The council can make whatever changes it wishes to the budget in the coming weeks before adopting it in September.

“I appreciate the ($5 million), but I think it’s important for us to know that’s not what we’re limited to,” Garza said.

VISIT VOTETRACKER: See how your Austin City Council member voted on key issues



Reader Comments ...


Next Up in Politics

Miami’s Haitians, accustomed to being shunned, rally after Trump slight
Miami’s Haitians, accustomed to being shunned, rally after Trump slight

When Jacques Despinosse lost a primary for the Florida House of Representatives in the 1990s, he chalked up his drubbing to the skepticism many voters had for candidates from what was then a relatively small Haitian diaspora.  But since then, Haitian-American politicians have made one electoral stride after another in the state, winning commission...
Kelly’s remarks unsettle a tense alliance at the White House
Kelly’s remarks unsettle a tense alliance at the White House

The one thing sure to make President Donald Trump angry, as anyone who has ever worked closely with him knows, is any suggestion that his staff is managing him.  Yet early Wednesday evening, after learning from a White House aide that his chief of staff, John F. Kelly, had described his views about his signature campaign pledge to build a wall...
Trump’s travel expenses test boundaries of policy and politics
Trump’s travel expenses test boundaries of policy and politics

President Donald Trump has reveled in smashing political precedent, but on Thursday he followed his White House predecessors in one of Washington's usually unspoken traditions: blurring the lines between a campaign trip and official business.  Jetting aboard Air Force One for a quick day trip to western Pennsylvania, Trump delivered a 25-minute...
As federal shutdown looms, GOP struggles to show that it governs
As federal shutdown looms, GOP struggles to show that it governs

The federal government late Thursday faced increasing odds of a partial shutdown, the culmination of a long period of budget warfare that has now imperiled what most lawmakers agree is the most basic task of governance.  The immediate challenge Thursday was a refusal by Senate Democrats to join with Republicans in passing legislation that would...
Under tax law, affordable rents may take a hit
Under tax law, affordable rents may take a hit

The last time that Congress approved a sweeping overhaul of the federal tax code, in 1986, it created a tax credit meant to encourage the private sector to invest in affordable housing. It has grown into a $9 billion-a-year social program that has funded the construction of some 3 million apartments for low-income residents.  But the Republican...
More Stories