Council members set maximum city tax increase at 6 percent

Council backs away from practice of approving increase up to 8 percent — maximum allowed without an election.


During their regular meeting Thursday, Austin City Council members set the maximum tax rate at 44.2 cents per $100 of property value, a rate that will increase exisiting tax revenue 6 percent in 2019.

The move doesn’t mean that will be the adopted tax rate, but the rate cannot exceed that figure. A draft budget proposed by staff members would raise taxes 4.9 percent, but expenditures typically increase once council members begin adding programs they would like to see funded.

Setting the maximum rate at a 6 percent increase marks a departure from the council’s tradition of automatically setting it at 8 percent — the maximum increase allowed without an election — while they debate budget proposals. Council members disagreed about the rate, but they ultimately approved it unanimously Thursday.

“At 6 percent, we have room to add things and move things around,” Council Member Alison Alter said. “As we talk about affordability and asking voters to support a $925 million bond, I think something we should do is keep our tax rate well below the 8 percent (revenue increase).”

Council Members Delia Garza, Kathie Tovo, Sabino “Pio” Renteria and Greg Casar indicated they preferred setting the maximum revenue increase at 8 percent. They said they had not reviewed the staff’s proposed budget yet and didn’t know what they might want to add.

“We always have significantly more asks, especially from our quality of life commissions, that significantly exceed the dollars we have,” Garza said.

Council Members Ora Houston and Ellen Troxclair, meanwhile, lobbied to set the maximum increase even lower, at 5.5 percent.

“This money is in addition to the new revenue that’s coming into our city from new development, new people moving here, new fees,” Troxclair said. “The city is bringing in over $50 million in new dollars without raising taxes a single penny. … I don’t know that many people who have gotten a 5.5 percent, 6 percent, an 8 percent raise year after year and that’s the precedent we’ve set.”

Ultimately, the council rallied around the 6 percent compromise.

“It’s important to communicate to folks in a year that we’re asking them to approve a bond … with such large sums for affordable housing, for transportation and bond elements, that we also send a message of fiscal restraint,” Mayor Steve Adler said.



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