Beside the Point: Taxing Effectively

Debate should focus on meeting community needs, not on arbitrary numbers

As each summer sizzles out, the city budget arrives in an avalanche of data and PowerPoint presentations, its detritus cluttering up the Chronicle newsroom until it's all swept away some time in September. And you still wonder why Michael King's been gone for three weeks?

Well, when he waltzes back in next week, as promised this time, it will all be over but the funding: Beginning Monday, Sept. 11, council has up to three days to pass the FY 2007 budget. Not that they'll need all that time: If memory serves correct, last go-around, the gang earmarked all greenbacks in one reading. Will this time be different? As with most matters in the Will Wynn era, any arm-twisting over funding priority has been off the dais, save for a dustup between Brewster McCracken and Mike Martinez over the merits of appraisal tax caps vs. homestead exemptions. As closing time approaches, major throw-downs over anyone's pet project look less likely.

Ditto for the tax rate, but lest we forget, there's still the none-too-little matter of setting the damn thing. For the uninitiated, the world's quickest civics lesson: The city's property-tax rate is set each year during budget talks. Due to rising property values, the previous year's rate, or "nominal rate" (44.30 cents per $100 in valuation), would bring in more money than it did last year. The "effective rate" (39.85 cents) is the rate that, accounting for rising values, brings in the same funding as last year (in all, $525.3 million). In its infinite wisdom, the state requires libertarian-lite "truth-in-taxation" measures setting the highest rate a city can level as an average of the two: This is the "rollback rate," set here at 41.26 cents; anything higher requires a citizen referendum to approve the rate. When Toby Futrell unveiled her proposed budget in late July, it was based on the effective rate, but council can, and probably will, go ahead with the rollback amount; they previously voted to set that amount as the ceiling for talks. But more importantly, there are little signs of life in the basement. Jennifer Kim and Will Wynn, last year's stalking horses for a lower rate, have made next to nary a whinny this go-round. This might just reflect the rising costs the city faces – not just inflation, but expanding services to meet the growing population and employees' health care costs (now including their domestic partners, if any).

If anything, this budget's discussion has been characterized more by what it isn't than what it is. In setting a sparse table based on the effective rate, Futrell laid out a bountiful buffet of want – $7.7 million in proposed, but unfunded, adds. And we're not talking about adding an extra janitorial shift at the Visitor's Bureau or a bump in latte allowances, either; we're talking about money to replace protective gear for firefighters, increasing patrol of increasingly deadly Austin lakes, and a host of community service and outreach needs. With each additional quarter-of-a-cent bump to the tax rate bringing in an extra $1.5 million, the $8.4 million garnered by going with the nominal rate barely covers Futrell's proposals.

Maybe the story shouldn't be what the rate is in our annual balancing act – with more than 80% of Austin residents willing to take on at least $20 extra per year in taxes for "strategic adds" to services, according to a study cited by Futrell, it's only the Grover Norquist cranks of the Statesman's letters page who are up in arms about what, in a worst-case scenario, comes out to about $4 a month. Instead, the real story is a few months away in the November bond election. It's there, among grandiose projects like a new central library and unprecedented millions for affordable housing and open spaces, you'll find millions for park pool repair and funds for replacing ailing AC and heating systems – things that should be paid for out of the general fund. It's in the rising parks fees for softball leagues, in the arcane litany of charges buried in your utility bills. It's all of these places, these unspoken, impolite avenues of income on which the city is increasingly reliant that tell the real story – that Austin's tax rate is truly rock-bottom compared to most of its neighbors, might be artificially so. A real look at Austin's budget shouldn't come but once a year, but should be an ongoing, evolving thing. But of course, to do so would require a revolt – after all, it is the city manager, entrenched after years of budget oversight, who leads the dance each year, not City Council. Here's hoping that they take a long look at their dance cards. end story

"Point Austin" will return next week. No, really – this time we mean it.

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Austin City Council, city budget, City Council

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