Austin leaders on Wednesday night passed a $3.9 billion 2018 budget — a new record for the growing city — after days and months of City Council frustration over wanting to add social services money and feeling hemmed in by previous spending commitments.
The budget for the fiscal year that begins Oct. 1 includes a $1 billion general fund, which covers most city operations, plus self-sustaining funds for things like electricity, water and aviation. It raises tax revenue 7.9 percent, just under the 8 percent limit that could trigger a rollback election, for a tax rate of 44.48 cents per $100 of property value.
An owner of a median valued home of $305,510 will see a $151 increase in city taxes and other fees.
Both the budget and the tax rate passed 8-3, with Council Members Ellen Troxclair, Jimmy Flannigan and Ora Houston opposed. Those three raised concerns that the city was dipping into its 12 percent reserve fund buffer, even if only slightly, and they wanted to slightly lessen the tax increase.
The budget does not increase the city’s 8 percent homestead exemption — that ship sailed in July — but the city’s homestead exemption for senior and disabled residents to bumped up from $82,500 to $85,500. The exemption lowers the value of a home for taxation purposes.
With little wiggle room in the budget to add new spending, the one department in which staff initially proposed major increases was Development Services. Staff proposed adding 51 positions and increasing the department’s budget by 55 percent — costs almost entirely covered by fees — in order to speed up permit reviews after the 2015 Zucker Report documented lengthy delays and other problems.
But the City Council backed away from that plan in the final days of budgeting, after Council Member Delia Garza raised concerns about steep development fee increases to pay for those new positions. Council members left those positions out of the approved budget, but may add them later with a budget amendment after they’ve evaluated the proposed fees in more detail.
Budgeting for public safety, which makes up 67 percent of the general fund, remained ambiguous, as negotiations are still ongoing to hash out multi-year labor contracts for police. Budget officers, not wanting to show the city’s hand amid the negotiations, didn’t outline what costs they assumed for public safety raises and new officers.
Local activist groups brought out members in droves during budget hearings to call for less money for policing and more for social services. But police advocates said the force is falling behind as the city grows and needs at least a dozen new officers to keep crime in check.
The city’s policies for rainy day saving came up for debate Wednesday as council members voted 6-5 to allocate money from the reserves for a Pay for Success homelessness program, even if it may not be spent in 2018. That leaves unallocated reserves at 11.9 percent of the total general fund, just under the 12 percent minimum city financial advisors recommend.
Later, the council voted to fund several items, including a disabled-accessible playground, with $92,000 of reserve money — an amount Mayor Steve Adler called “a rounding error.”
Some tensions flared when Troxclair led a successful vote to have $1.2 million in hotel tax revenue pay for security at festivals, intending to follow that with a request to put the corresponding savings from the general fund toward tax relief. But Council Member Greg Casar preempted her with a motion to put $580,000 of it to various social services. That measure passed 7-4, with Troxclair, Flannigan, Houston and Alison Alter opposed.
The council agreed to spend the remaining $420,000 and $200,000 on lowering the tax increase a fraction of a percent and increasing the senior homestead exemption, respectively. That $420,000 translates into roughly a dollar of savings for the median homestead.
The 2018 budget built in cost increases for things already approved, like $1.9 million and nine new employees to staff the new Central Library, set to open next month, and 2.5 percent pay increases for civilian city employees.
That left a thin, $5 million buffer for council members to squeeze in additional priorities and led to drawn-out small-dollar politicking this week.
Ultimately, the council voted to fund $1.1 million for parent support specialists at the Austin school district, $840,000 to increase the capacity of homelessness services and expand outreach, $700,000 in public health contracts, $637,000 to pay temporary employees the city’s living wage of at least $14 per hour and offer them sick leave, and $135,000 for immigrant legal services, among other priorities.