Diminishing Returns: Budget Cuts Under Future Consideration

The city budget staff does not present a proposed budget to City Council for its consideration until late July, but because of legislative timelines, Council has adopted a homestead exemption of 6%, which the budget staff anticipates will cost from $5 million to $7 million. Mayor Steve Adler has proposed paying for this by raising the property tax rate in proportion to the foregone revenue. However, Council has also considered potential budget cuts, both for the originally contemplated 20% annual exemption, and this more modest, "phased-in" exemption. Moreover, not all Council members support raising the property tax rate, and some have suggested cuts or savings to allow property tax relief.

In May, staff delivered to Council a report – "Potential Service Reductions and Revenue Enhancements" – identifying $23 million in potential department cuts or income enhancements that would help enable a homestead exemption without, as much as possible, cutting "core services." The exemption (as enacted) would not require that level of budget adjustments, but many of these items will become part of the late summer budget discussions. In his May 12 cover memo to Council, City Manager Marc Ott pointed out that because of the size of public safety budgets (70% of the General Fund), the largest available cuts are to those departments.

A few highlights and notes:

Austin Police Department: $8.7 million APD listed 93 positions ("full-time equivalents") for potential elimination: District representatives (44 positions); Office of Community Liaison (11); Highway Enforcement (38)

Austin Fire Department: $2.8 million Overtime and service reductions, leaving vacancies unfilled, reducing wildfire fuel mitigation, and eliminating five civilian-support positions

Communications and Technology Man­age­ment: $1.7 million Eliminating one FTE as well as contractors and overtime

Parks & Recreation: $1.6 million Ending Trail of Lights storage, eliminating 13 Ranger positions, eliminating event fee waivers, and raising prices at Barton Springs and Deep Eddy

Emergency Medical Services: $1.5 million Eliminating 13 positions in support roles, including three sworn positions, training staff, civilian CPR training, warehouse, etc.

Fleet Services: $1.3 million Fuel cost reductions (dependent on stable prices)

Other departments: $5.4 million Miscellaneous

Alternatively (or in addition) to these staff-­proposed reductions, certain Council members have indicated they might propose other reductions: eliminating economic incentive programs, eliminating "vacancies" (positions budgeted but unfilled), reducing proposed wage increases for city employees, reducing the library budget, and/or eliminating city management positions. All of these choices will become part of the July/August budget discussions.

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Posted here is the full “Potential Reductions and Revenue Enhance­­ments” report and City Manager Marc Ott's cover memo to City Council.