The Austin City Council went large early Friday morning: $720 million large.
The council, on an 8-3 vote, endorsed Mayor Steve Adler’s proposal to ask voters for permission to sell $720 million in property-tax-based bonds for transportation improvements over the next five years. That borrowing would require a tax increase of just under $60 a year for the average homeowner to pay back that debt.
A few hours before that 1:40 a.m. Friday vote, though, the council narrowly supported giving homeowners a break on their tax bill by increasing the homestead exemption from 6 percent to 8 percent. That could bring about $23 in savings for the typical homeowner with a $250,000 home — but it will amount to $3.8 million in lost revenue to the city.
The later vote on the transportation bond fell short of Adler’s hope of “consensus” but still amounted to a vote of confidence from the council. Actually calling the election will require at least one more vote, expected in mid-August. Then Austin voters would get the final say.
Council Members Ann Kitchen, Delia Garza and Ora Houston voted no on the bond proposal. Both Garza and Kitchen, who clashed with Adler heatedly over a late amendment seeking to guarantee more money for South Austin, pronounced themselves disappointed with the process that led to the vote.
Adler said the proposal, endorsed Wednesday by a coalition of most of the city’s leading business groups and several bike and environmental advocacy organizations, was the result of two months of give-and-take discussion among a broad range of community voices.
“We have a unique opportunity in this election coming up to do something significant,” Adler said.
But the size of the proposal, nearly five times larger than any transportation bond proposition passed by Austin voters, has generated concern. Members of the public raised questions Thursday about the city’s ability to actually do that much road, bike lane and sidewalk work in six to eight years, and about the proposal using up half of the city’s existing $500 million in “bond capacity” — debt that could be incurred without raising the current property tax rate.
The fear is that other city spending needs — on public safety, affordable housing, libraries, flood mitigation and parks — will be shortchanged because of a heavy emphasis on transportation.
Those concerns, compounded by residents’ angst over property tax bills, led Kitchen to raise the specter of a possible tax revolt and to propose a smaller $500 million bond, which the council rejected.
Adler said Friday that the council is aware of those pressures, and he pointed to its preliminary approval increasing the homestead exemption to knock 8 percent off the taxable value of a home. That measure was supported 6-5 by the mayor, Kitchen and Council Members Sheri Gallo, Leslie Pool, Ellen Troxclair and Don Zimmerman. It must return to the council for one more vote.
Other proposals Thursday to increase the homestead exemption to 10 percent or 20 percent failed, with only Gallo, Troxclair and Zimmerman in favor.
“I know that there were some members of the council that were concerned about having a tax increase associated with a bond election,” Adler said Friday afternoon.
“I think that getting the homestead exemption makes any kind of spending decisions that we have — puts it in a better context,” he said.
What’s in the plan
The centerpiece of Adler’s plan, unveiled in late May, is $482 million for improvements on seven “smart corridors:” North Lamar Boulevard, north of U.S. 183; South Lamar from Lady Bird Lake to Ben White Boulevard; Burnet Road north of Koenig Lane; Airport Boulevard from North Lamar to the river; East Riverside Drive between Interstate 35 and Texas 71; Martin Luther King Jr. Boulevard east of U.S. 183; and Guadalupe Street in the University of Texas area.
That money would pay for a variety of changes, including added bike lanes and sidewalks; raised medians with left-turn bays at major crossings; added left- and right-turn lanes; strategically relocated bus stops, bus cut-out lanes and special signals allowing buses to re-enter the traffic flow; and reconstruction of aging streets and drainage upgrades on roads originally built without curbs, gutters and storm sewers.
But the $482 million provided accounts for less than half of the more than $1 billion needed to build out the plans for those corridors, said John-Michael Cortez, a special assistant to Adler.
“Obviously, we’re not going to get them all done with this tranche of money,” he added.
The plan includes $101 million for suburban road expansions focusing on Zimmerman’s District 6 and Gallo’s District 10. Both voted for the plan.
What about South Austin?
The plan also includes, at the city staff’s discretion, engineering studies of nine other major city streets, many of them in South Austin, to put them in a position for future improvements. Kitchen and Garza, whose districts are south of the Colorado River, were critical of the plan, and voted against it, because of what they see as a plan tilted north.
“There are needs in South Austin, needs that shouldn’t have to wait in line,” Kitchen said, arguing for the plan to include more money for improvements in South Austin.
And the plan includes up to $137 million to expand the city’s sidewalk, bike lane and trail systems, and make repairs on a number of other city roads.
The plan would require a property tax increase of 2.25 cents per $100 of taxable value, or $56 a year on a $250,000 home. The tax hike would be phased in over the next five years because the city would need six to eight years, even at accelerated pace, to get the work done, Assistant City Manager Robert Goode told the council last week.
To officially call a November bond election, the council would have to hold a separate vote in August after returning from its summer recess.