Everything's Coming Up Green for City Employees in Better-Than-Expected Budget

City of Austin employees took the spotlight today (Friday, July 15) as City Manager Spencer Cronk presented his proposed fiscal year 2023 budget, a $5 billion spending plan buoyed by Austin's booming economy that manages to avoid both layoffs and property tax increases.

That happy medium looked like it'd be impossible to achieve a year ago, when the budget drop was accompanied by dire warnings from city financial staff about the impact on future fiscal years of the state's revenue cap. That statute, updated by the Texas Legislature in 2019, limits how much revenue cities can raise through property taxes without voter approval, a cap that does not account for the rising cost of everything here in the nation's fastest-growing major metro.

So if Cronk had proposed a fiscal 2023 budget this morning, at Montopolis Recreation and Community Center in Southeast Austin, that either eliminated positions from the city's 16,000-member workforce or called for a property tax increase that would need to go to the voters in November, it wouldn't have been surprising, though it sure would have been unpleasant. Instead, Cronk beamed as he described how Austin's years of careful fiscal management and ample cash reserves, combined with the city's "spectacular economic growth," allowed City Hall to instead add more than 350 new positions and invest more than $60 million in employee raises and bonuses, without using federal relief and stimulus funds to plug holes, and to lower the average homeowner's tax bill by about $100. "Are we lucky in some ways? Yeah, we are," Cronk told the crowd of city employees (mostly) who attended. "But we can be both lucky and good."

Because of Austin's endless boom, now in full resurgence as COVID-19 shutdowns recede into memory, the city now forecasts not running up against structural budget deficits for the next four years, and then just barely dipping into the red in fiscal 2028 – about the best news Cronk's been able to share about city finances since he arrived in Austin in 2017. But that doesn't mean everyone is happy! While the fiscal 2023 proposal does some good and avoids much that is bad, it also doesn't go as far as many advocates (and perhaps some of their Council allies) have wished during the run-up to the budget drop.

These include the public safety boosters at the Greater Austin Crime Commission, who before Cronk had even left the Montopolis Rec Center issued a statement saying the budget "does nothing to solve Austin's public safety staffing crisis," as it adds neither new sworn positions nor expands training to fill more than 500 vacant police, fire, and EMS slots. From the opposite side of the political street, a coalition of nearly 60 nonprofits and advocacy groups – some of whom don't really see eye to eye on all issues – gathered at City Hall Thursday evening to roll out their $74.4 million proposal to invest in restorative social services for those most in need in our community – rental assistance, resilience hubs, victim services, harm reduction, violence prevention, and more.

Some, but certainly not all, of these items are funded to some degree in Cronk's proposal. This includes the "$22 in '22" campaign, endorsed by Council a few weeks back, to raise the city's minimum wage, which Cronk said could be accomplished over time – the fiscal 2023 plan raises it to $18. It also gives all civilian employees (that is, not sworn public safety) a 4% wage increase, which isn't a lot but is larger than the city has managed to provide in nearly two decades.

Cronk also has included a bonus of up to $1,500 for every city employee (including public safety) with more than one year of service, to promote workforce retention as well as give people a little something extra. "The simple truth … is that we do not currently have the staff we need to deliver the services we must," Cronk told the crowd. "The core feature of our FY 23 budget proposal is a renewed emphasis … to recruit and retain the people we need to do the job that our community expects of us."

While property tax bills may be slightly lower, an increase in utility bills – most notably Austin Energy's proposed hike in its base rate and a 15% increase in the transportation user fee that pays for street maintenance – means the "'typical' residential ratepayer" will be paying about $10 per month more to the city. (That burden will be higher on renters who pay their own utility bills but don't get the offsetting tax decrease.) The proposed FY 23 General Fund budget, which includes sales and property tax revenues and transfers from the utilities (the "dividend" you receive as a resident/owner of Austin Energy and Austin Water), adds up to $1.26 billion, more than one-third of which goes to the Austin Police Department. The all-funds budget of $4.97 billion includes along with the GF not only AE, AW, and Austin Resource Recovery but also the convention center and airport; watershed protection, code enforcement, and development services; hotel occupancy tax revenue; and the property tax revenues being earmarked for the Project Connect transit system overhaul.