Austin homeowners and business owners are potentially looking at a double hit on their 2014 property tax bills that would not be necessary if the city weren’t giving away millions of dollars a year in waivers, services and incentives to profit-making ventures.
The double hit comes from the city’s push to raise the tax rate at a time when property values are going up. Rising property values, new business and construction, higher sales tax collections and a robust economy should balance the budget without a tax increase. Those economic trends and others would allow the city to collect more money just by maintaining the current rate of 50.29 cents per $100 of property value. But policies crafted years ago have become a drag on the city’s $803 million general fund budget — and the public’s pocketbook. Instead of asking taxpayers to pay higher and higher taxes and fees, the city should take other steps to close a $7.8 million gap. Why not require profitable ventures receiving freebies to pay their way?
On Monday, when the Austin City Council starts voting on its 2013-14 spending plan, it should right the ship by reversing policies that shift certain costs onto taxpayers.Policies to help events, charities and enterprises put down roots and grow may have made sense once. Many of those enterprises now are profitable, and it’s time that those ventures start paying their way.
The council should start by requiring profitable enterprises to pay their fair share of public safety costs for police, fire and EMS services associated with staging big events in Austin. That is not happening now.
Information we received under the Texas Open Records Act shows the following public safety costs for regular and overtime expenses charged to the city’s 2012-13 budget:
•South by Southwest expenses for police totaled $947,053 for regular and overtime expenses; fire costs associated with the 10-day event totaled $32,284; and for EMS, $33,589. SXSW was not billed for any of those costs and, therefore, did not reimburse for them.
•Circuit of the Americas (Formula One) costs for police totaled $693,612. The circuit reimbursed the city $40,473. Expenses for fire services totaled $75,521 for regular and overtime. The circuit reimbursed the city $6,888. EMS expenses for the three-day event totaled $101,069. The circuit reimbursed the city $51,840.
•Texas Relays costs for police totaled $195,177, but there was no information available for fire and EMS. Texas Relays was not billed and did not reimburse for police expenses.
•The Republic of Texas Biker Rally costs for police totaled $23,213, for which the city billed $17,417. Fire services for the two-day event were $2,420. The Fire Department did not bill rally organizers, so they did not reimburse the city. EMS services were $9,744, for which the rally reimbursed the city $4,590.
Some of the aforementioned expenses charged for police, fire and EMS would be incurred as part of regular business. But costs for overtime are directly related to those events.
It is possible to design a better system, given that some businesses are picking up the aforementioned costs for their events. One that stands out is C3, which should serve as a model for the council. It pays it way for costs associated with its annual Austin City Limits Music Festival and has proved to be a good neighbor by maintaining Zilker Park’s Great Lawn and contributing generously to the city’s parks foundation. Since 2008, the American-Statesman, which stages the annual charitable Statesman Cap 10K run through downtown Austin, pays all costs associated with the event.
Last week we mentioned other policies that cost taxpayers but no longer make sense. The city gives away more than $1 million a year in waiving fees for events. Waivers cover venue fees for parks, setup fees on Auditorium Shores, cleanup fees, traffic control, parking, litter control, alcohol permits, additional trash bins and other things. South by Southwest is getting the biggest waiver, totaling $553,447, followed by the Austin Farmer’s Market at $184,053.
Among the least known waivers, amounting to $42,000, are those set aside for individual council members, who get $6,000 each in waivers to hand out at their discretion. No matter how small, they should be eliminated, preferably before the council shifts to a 10-1 system, which presumably would expand those accounts to 11. They are essentially patronage funds for individual council members. Kudos to Council Member Bill Spelman for not taking his portion of those fee waivers.
The city’s economic incentives policy also should be overhauled in the future. Next year, the city will award 11 companies that bring jobs to Austin more than $17 million in incentives, mostly in the form of tax abatements. Among the recipients are Apple Computer, Samsung, Visa, eBay and Facebook. While there are circumstances under which incentives can and should be granted, the policy should be narrowly tailored with guidelines that provide substantial jobs and benefits for the city and their taxpayers, who must pick up the slack for abatements. The policies need more balance. At this point, they are too broad and favor private companies’ goals over community goals.
As we noted, there is much the City Council can do — other than continuing to hike up taxes every year — to balance the budget. Stop the giveaways and do right by taxpayers.