Mayor Adler on How the 86th Legislature Will Affect Austin

In the wake of sine die, Mayor Steve Adler offered the Chronicle a few comments about the 86th Legislative session, and most specifically its likely effects on Austin and other Texas cities. Overall – it’s not a pretty prospect.

Like many observers, Adler shared mixed thoughts on the just-concluded Legislative session. “I’m obviously concerned about the revenue caps,” he said, referring to the 3.5% cap to be imposed on local property tax increases (without a public referendum). He praised the increases in public school funding – “although it’s not clear how they intend to pay for it, long term” – and said he was pleased that “we weren’t preempted on fair-chance hiring and sick leave” for local workers. As in many previous sessions, he said, the good news was largely “in terms of stopping bad legislation,” and he praised the central Texas delegation for fighting hard on local priorities “in significant leadership positions.”

Looking forward, Adler’s primary concern, along with the other City Council members, is how to plan future city budgets under the state’s forthcoming property tax cap. “And they also took cable company [easement] fees – about $6 million annually. That [means the] actual cap is closer to 3.1%.” He said the city’s annual structural cost drivers – expected increases in health insurance coverage costs, rents, and salaries – amount to 4-5% increases at current budget levels.

“Something’s going to have to give,” he said. “It’s real. And it’s going to impact things that our community wants us to do in all areas of the budget.”

The mayor said conversations have already been ongoing among budget staff and Council members about how to prepare, and the spring budget preview – normally concluded by this time – has been delayed while staff waits for the Legislature to act. “We’re talking about different things, various options. We have to consider going to the full amount [the current rollback cap of 8%] to build reserves” in anticipation of the lower cap next year.

Adler said the concerns include both trying to maintain current services and “things we would like to do that we’re not doing now. That includes hiring more officers to handle sexual assault cases, more attention to solving homelessness, work on the land development code … The caps will make all this harder.”

If there was a “silver lining,” he said, “it was the bipartisan alliance among city officials across the state. I was talking to 25 to 30 mayors weekly about what we all saw as an attack on cities, generally and unfortunately. The intent of the people supporting [the caps] would supposedly deliver tax relief, but by the last day the author of the bill was admitting on the floor of the House, that was not the case. The cap will leave us upside down in our budget, about a $40 million [deficit] in three years, for savings to the typical homeowner of about $1.80 month.”

Asked about the motivations of the Republican majority – many of whom began as local officials – Adler said, “There’s an extreme voice that seems to have taken over the many in the Republican Party. The state’s demographics are changing. It could be they’re just trying to hold onto power as long as they can.”