Austin @ Large: Into the Gap
Futrell's budget spreads the pain among everyone -- except us
By Mike Clark-Madison, Fri., Aug. 9, 2002
The short answer is "Not as far as you should be." But how tired are you of reading my thoughts about Austin's artificially low property tax rate -- which has declined nearly 30% since 1990, and which is (much to Futrell's pleasure) not slated for an increase in next year's budget? Probably as tired as I am of writing about it, and I will cheerfully concede that now, with the local economy struggling through a nasty bout of chronic fatigue, is not a good time to raise taxes. So I'll stop beating that horse.
Well, except for one thing. Over the years, we've all heard several rationalizations for why Austin should have a property tax rate that's 20 cents lower than Houston or Dallas and 40 cents (that's nearly 50%) lower than Fort Worth. We own, and feed off, our power company. Fine, but we could conceivably have lower electric rates and a more honest tax rate. Well, look at the combined tax burden -- not just city, but county and schools as well. Fine, but even our combined tax rate is lower than that paid elsewhere, though admittedly not by as much as the city's rate is alone.
This year, we hear a new excuse: Look at the combined bill, and thus take into account Austin's highest-in-the-state property values. This rationale is pretty convincing -- the average Austin tax bill for 2001-02 was the highest in the state both in dollar terms and as a percentage -- 5.6% -- of average income. (Taxpayers in San Antonio, where both incomes and property values are quite a bit lower, pay 5.4%; folks in Fort Worth, with its enormous city tax rate, pay only 3%.) Thus speak the experts at City Hall. I should shut up now. But ...
The Core Problem
Call me a pinko, but should we not set our tax rate to correspond to the needs of the community and its demand for services, regardless of how much money we all have or how expensive our homes are? It's those demands, after all -- in other words, Austin's "quality of life" -- that got us into fiscal trouble. Futrell and Co. started this year's budget process trying to figure out how to bridge a $75 million "structural" gap -- not one-time contingencies like our share of the post-September 11 bill, but basic living beyond our means.
Many feel this proves City Hall is wasteful and inefficient. But anyone who's dealt closely with City Hall has probably seen the opposite. Departments vary in their resourcefulness, and we can all quibble about the wisdom of each small-ticket budget item. But considering the intensity of its customers' desires, City Hall as a whole does an acceptable job with the money it gets. (I just returned from a trip to a locale where, after the feathering of many beds, a 150-foot-long two-lane bridge cost $6 million. Compared to that, Austin City Hall is a model of fiscal prudence.)
It is we, the taxpayers and citizens, who produced that $75 million "structural" gap. You may remember that, back when panic first set in over the FY2003 budget, Futrell and her staff aimed to classify city endeavors as "core," "semi-core," or "non-core" services. Unfortunately for bad-government theorists (who likely don't trust Futrell's self-analysis), nearly 70% of city General Fund spending went to "core" and "semi-core" services; less than 1% went to "non-core," and the rest went to various forms of overhead, out of which Futrell has squeezed $17 million to help bridge the nefarious gap.
We Can Pay It Now --
The problem is not that City Hall throws money at frills; it's that Austinites want their core services provided in a remarkably labor- and capital-intensive way. We spend more per capita on public safety than any other Texas city, largely because our police have the highest salaries in the state, but you may have heard from the powerful citizens who think we don't spend nearly enough. Compared to other cities, on a per capita basis, we have an absurd amount of parkland and twice as many branch libraries, and that's exactly how many in the community want it. And so on and so forth. Even Smart Growth incentives -- everyone's favorite fish to shoot in the budget barrel -- are attempts to compensate for the ornate and expensive development process born of citizen desire and outrage.
For years, City Hall has made everyone happy with speculative budgets that, as Futrell admits in the transmittal letter -- not in a finger-pointing way, but with admirable candor for an official in her shoes -- "understandably" relied on boom-inflated sales tax proceeds, instead of on more stable property tax revenue. Had we kept our property tax rate flat for the last decade, which due to state law is admittedly not as easy as it sounds, but maintained the same level and growth of services, we might be $75 million in the black, not in the red. (Each cent of property tax, based on the current tax roll, equals about $5 million in city revenue.)
But it's too late for that now. Instead, Futrell has closed the gap by cutting 321 vacant General Fund jobs (about half of the ones that had been frozen), deferring pay raises, increasing the Austin Energy subsidy, hiking various city fees, postponing capital spending, and various other strategies. Most of these are termed "ongoing" changes, as opposed to "one-time" changes that don't solve the structural problem. But the distinction is a bit murky; Futrell says she plans to reinstate pay raises in FY2004, for example, which -- unless the economy does something magical here pretty soon -- would simply require an offsetting cut to something else.
To the degree that Futrell has been able to spread the budget crisis out among all city employees and functions, "Bridging the Gap Together" is an apt title. But it's not too soon to start thinking about how we, the citizens who created City Hall to serve our needs, can do our part in this effort.
Budget Schedule
The budget season began in earnest this week, with public presentations and hearings on the public safety (police, fire, EMS, Municipal Court) and enterprise (Aviation, Austin Convention Center, and Solid Waste Services) sections of City Manager Toby Futrell's proposed fiscal 2003 city budget. There will be no budget hearing this upcoming week.
The cycle resumes on Aug. 21-22 (Wednesday work session at 10am, Thursday public hearing at 6pm during the regular council meeting) with presentations and hearings on the cluster of land-use departments (Neighborhood Planning and Zoning, Transportation, Planning & Sustainability, and Watershed Protection & Development Review), along with Public Works, Austin Energy, Water & Wastewater, and the capital improvements budget.
The following week -- Aug. 28-29 -- will feature the community services section: Parks & Recreation, the Austin Public Library, Health & Human Services (including the Primary Care Dept.), and Neighborhood Housing & Community Development.
After that, no hearings are scheduled until the actual adoption of the budget on Sept. 9, 10, and 12. (Last year, the council did its third and final reading of the budget on Sept. 11, but they're skipping that date this year, for obvious reasons.) The city's new fiscal year begins Oct. 1.
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