Proposed Austin budget increases taxes, but less than it did last year


Highlights

Staff’s recommended budget calls for modest additions of police and firefighters.

Owner of median value home faces estimated $61.48 jump in city portion of tax bill.

Austin residents will see a tax increase in 2019, but under a proposed city budget unveiled Monday, it could be the smallest in years.

The city staff has recommended setting the tax rate to increase revenue just under 5 percent, not the 8 percent maximum allowed by state law, which Austin typically hits.

That means an estimated increase to the city’s portion of a property tax bill of $61.48 for a median value home, worth $332,366, with a homestead exemption. Fees for transportation use also will go up, but other fees will remain stable. The average homeowner is expected to pay $4,022 for all city taxes and fees in 2019, an increase of $78.

LAST YEAR: Approved Austin 2018 budget will bring average $151 tax, fee increase

Austin’s 2019 budget is set to be $4.1 billion, the largest ever and $156 million more than 2018. That includes a $1 billion general fund, supported by taxes, to cover most city operations and self-supporting enterprise funds overseeing utilities and the airport.

The 2019 budget is much less tight than those in recent years, thanks to health insurance premiums remaining stable and ongoing labor contract negotiations keeping public safety salary increases low, said Ed Van Eenoo, chief deputy financial officer.

The projected tax increase will cover cost of living increases for employees and fund such additions as 21police officers — plus 12 funded midway through this year — and 16 firefighters for a new Onion Creek fire station. The proposed 2019 budget also includes $3.1 million more for an affordable housing trust fund and $3.1 million more for homelessness programs.

“Public safety is the largest component of our general fund budget,” City Manager Spencer Cronk said in an address to council members and the public at Austin’s Mexican American Cultural Center. “While (additional staffing) satisfies some of the immediate needs around community policing, it’s critical that we secure a labor agreement before we make decisions about future staffing levels.”

Austin’s goal to get all contracted city workers up to a minimum wage of $15 will occur in 2019 — a year earlier than anticipated — at a cost of $1.9 million. The staff also recommended funding $6.7 million in miscellaneous requests from the city’s quality of life commissions, including more translation services, a parks public event leader position and a shuttle driver to help children and seniors participate in more parks events.

Development Services, which handles permitting for new development in Austin, next year will break from the general fund to become its own enterprise fund. Fifty additional staff members will be added, funded by permitting fees. Last year, City Council members held off on approving the extra positions, despite efforts to speed up permit reviews after a 2015 report found lengthy delays in the process.

Separating permitting from the rest of the budget is part of “really wanting our development activity to pay for itself,” Van Eenoo said.

The budget will change, either slightly or drastically, over the next month and a half as council members propose edits. The fiscal year begins Oct. 1.

BACKGROUND: Austin city taxes, fees expected to hit $4,032 for average homeowner

Monday’s budget rollout to city leaders represented a different process from in past years. Rather than showing City Council members and the media the funding for individual departments, the city finance staff broke down expenditures by strategic outcome. The city has made shifts recently to view its operations through the lens of a strategic plan pointed toward six priority outcomes, which were set by the council.

Departments now fall fully or partially within one of the priorities: mobility, affordability, safety, health and environment, culture and learning, and government that works for all.

“When I took this job, one of the commitments I made was to make the budget process more focused, streamlined and consistent with your priorities as a council,” Cronk said. “The goal was to make budget deliberations and adoption smoother and more predictable.”

Austin’s leaders have been concerned about whether in 2019 the Texas Legislature will lower the maximum a city is allowed to raise taxes, as some lawmakers proposed last session. That would throw a wrench into Austin’s budgeting, which depends on near-maximum tax increases nearly every year.

In April, forecasting a 2019 budget with more wiggle room than in the past, Van Eenoo suggested raising taxes the maximum 8 percent and putting the difference into a rainy day fund, to buy more time in case there’s a need to greatly shift budgeting. That’s not a staff proposal at this point.

“There didn’t seem to be strong support for it,” Van Eenoo said.



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