Austin approves $4.1 billion budget, upping property taxes, fees $77

Sept 11, 2018
The Austin City Council denied an emotional appeal from Council Member Greg Casar to raise taxes to put $3 million more into funding for homelessness programs. RICARDO B. BRAZZIELL / AMERICAN-STATESMAN

Austin city leaders approved a $4.1 billion budget — the city’s largest — after a day of tweaks that included their consideration of setting aside money to guard against possible tax-increase caps before they changed their minds.

The City Council approved the document by a 10-1 vote Tuesday, with Ellen Troxclair opposed. It sets a tax rate of 44.03 cents per $100 of property value, making the city’s portion of the tax bill roughly $1,317 for a median value home, worth $332,366. That’s a $66 tax bill increase on a median value home compared with 2018.

Total city taxes and fees are expected to go up about $77 for the average homeowner. The 2019 fiscal year will begin Oct. 1.

The council settled on a tax rate that increases revenue from existing sources 5.4 percent, up from a 4.9 percent increase under a staff-proposed draft budget. That’s less than the 8 percent maximum increase allowed by law without an election, which has become the typical practice in Austin.

The budget includes a $1 billion general fund, supported by taxes to cover most city operations, and self-supporting enterprise funds for such concerns as utilities and the airport. The tax increase will cover cost-of-living increases for employees, 21 new police officers, 16 firefighters to staff a new Onion Creek fire station and increases for affordable housing and homelessness programs.

The council this year increased the city’s homestead exemption, which decreases a home’s value for purposes of taxation, to 10 percent. On Tuesday, it increased the exemption for senior and disabled residents $2,500, to a total of $88,000.

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

The Legislature has debated lowering the state’s 8 percent tax increase cap to 4 percent or 5 percent, which Austin leaders said would throw a wrench into budget projections that depend on yearly tax increases. Council members first said Tuesday morning, at Mayor Steve Adler’s urging, that they would set the increase at 5.9 percent for 2019 and put $4.3 million to serve as a buffer in case the Legislature lowers the cap.

Hours later, however, the council had approved amendments from Alison Alter and Greg Casar to add $2.5 million to homelessness services, school district support, victims service counselors, workforce development and relationship violence programs.

Council Members Jimmy Flannigan and Troxclair urged their colleagues to stop the tax increases there, at 5.4 percent, and scrap the idea of putting the rest into reserves.

“What we just went through, where a majority of council members said they supported putting that money into reserves and, a few hours later, had spent over half of it — it shows that’s not our strongest suit,” Troxclair said.

Most of the dais agreed, with Adler, Casar and Council Members Kathie Tovo, Leslie Pool and Ann Kitchen opposed.

Council members agreed to split $1.7 million in one-time funding for a new municipal court, expected to be freed up by a delay in the new facility, to projects including a mental health Mobile Crisis Outreach Team.

The council denied an emotional appeal from Casar to raise taxes to put $3 million more into funding for homelessness programs.

“We have real human needs right now on the street, folks that we see every day, that we walk by, who are dying on the street,” Casar said. “I don’t want us to get caught in this trap, this lie, that the property tax burden people are facing is because we’re trying to help homeless people at a cost of cents a month.”

The move failed 5-6, with only Casar, Adler, Tovo, Pool and Kitchen in support. Flannigan noted that the 2019 budget already includes a $2 million increase in funding to address homelessness.

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

Despite the final-week wrangling, budgeting for 2019 was less contentious than in other recent years, with the budget approved on the first of three scheduled days to consider it.

This year marked the first time that Austin leaders have chosen to look at budgeting through the lens of “strategic outcome” priorities such as homelessness and affordability, rather than the needs of individual departments. City leaders had more wiggle room for their priorities this year, thanks to health insurance premiums for employees remaining stable and ongoing labor contract negotiations keeping public safety salary increases low.

*This story has been updated to correct the vote breakdown regarding stopping tax revenue increases at 5.4 percent and not adding tax revenue for reserves. Council Member Alison Alter supported the measure and Council Member Greg Casar opposed it.