Although I promise myself annually that this year I'm really going to get my arms around the city budget – no doubt you made the same New Year's resolution – here it is the middle of budget season, with the departmental presentations beginning this week, and I've barely managed to skim the executive summaries. We've already danced the annual ritual two-step: 1) "We're $20 million in the hole!" – accompanied by the gnashing of teeth and the rending of garments (especially at the Daily Bat Cave), followed a few weeks later by 2) "Move along, there's nothing to see here," when perfectly predictable adjustments in the available revenue provide a balanced budget, which the City Council then tweaks in response to public hearings. That's where things stand now, and judging from the prevailing winds, the first tweak is likely to be to the trash cans (see City Hall Hustle).
That's not to say we're rolling in dough. As the heavily mortgaged, war-drugged national economy continues to founder and spiking gas prices cut into disposable income, last year's optimistic local revenue projections (especially of sales-tax receipts) failed to hit their marks. (On the other hand, Austin's growth and still-rising property values, very mixed blessings both, generate increased tax revenue even at a lowered tax rate.) The estimated increase in 2008-09 expenditures ($48 million) outstripped the anticipated revenue increase ($27.4 million), leaving a roughly $20.6 million "deficit" – the gap now semiofficially closed by cuts or adjustments in the various city departments.
Not all of those cuts will be equally welcome. The Austin Police Department came up with $1.5 million by abandoning its "80%" shift-staffing rule, which had cost a headline bundle in overtime – now officers will be deployed "based on ... demand and crime statistics." Parks & Recreation saved $1.6 million by not filling 24 vacant positions – according to the city, roughly 5% of the department's entire personnel. (If you spend much time in the parks, you probably won't consider that reduction a great idea.) Another $5.5 million was cut in administrative and technology support (a broad category), and adjustments in affordable-housing operating funds (made possible in part by the citizens bond vote last year) saved $1.4 million – although that move may get strict scrutiny at council.
And so on. All of the city's employees will feel the pinch, thanks to only a 2.5% raise (instead of a projected 3.5%), and even that bump is delayed until December. The city calls that "corporate savings," but I call it our public employees' contribution to the general welfare.
None of this is set entirely in stone, but it is mostly tinkering around the margins of a $620.7 million General Fund budget that is itself just a subset of the $2.8 billion all-funds budget, which includes Austin Energy, Austin Water Utility, Austin-Bergstrom Airport, etc. I haven't even mentioned the cuts that have already raised public eyebrows: reallocation in the libraries to increase security but cut hours, flatlining road maintenance that would push the city further behind on its 10-year goals, the nearly 40% boost in trash fees. There's been some public grumbling on all these issues from council members, and we can expect to hear more uneasiness – and probably some adjustments – during the public hearings (see City Hall Hustle).
More contentious matters are yet to come, some not to be resolved in one budget cycle. The 2% "public safety premium" for police officers and firefighters seems already a casualty of tough times, but the unions have indicated, understandably, they won't simply wave it away – however loud the howling from the Bat Cave. Their initial police contract request is a 3% raise, hardly outrageous in comparison to the 2.5% budgeted for all employees, but whatever the final number, it's unlikely to bust the city's parameters.
More intriguing is what happens to the public safety staffing numbers over the next several years. As Jordan Smith reported (APD: Jail first, questions later?), for inexplicable reasons the APD brass has resisted implementing the "cite and release" state law for low-level offenses that would not only reduce the number of publicly burdensome arrests but save millions in enforcement dollars. The public safety unions have previously declared a priority, over salary raises, of staff increases to serve an expanding population. Is the city administration at least attempting to respond to the same priority?
It's those larger questions that best reflect the city's long-term values, and it's worth reminding ourselves annually that "public safety" writ large – APD, firefighting, emergency medical services, Airport and Park Police, and municipal courts – consumes two-thirds of the General Fund budget. Setting aside water and power (which we pay for separately) and miscellaneous fund transfers, that leaves a paltry 20% or so for those amenities like libraries, parks, public health, planning and zoning, watershed protection – all the things that make community life livable and engaging, as opposed to just survivable. Over the long term, we haven't established a very civilized balance.
As she was contemplating her final budget earlier this year, retiring Mayor Pro Tem Betty Dunkerley let slip the dirty secret of Austin's finances: "We have too low a tax rate for a city this size." Much of that constriction is structural and out of the council's hands – the Legislature devolves what should be primarily state expenses (public schools, higher education, public health) downward onto the cities, and then legally hamstrings municipal government from establishing property-tax rates that respond to those broader public needs. (Schools garner nearly 60% of the local property tax bill; the city, about 20%.) But Austin city councils have been historically gun-shy of establishing tax rates that fully respond to the city's rapidly expanding needs, preferring instead to rely on rising property values and regular bond elections to patch the holes in what should be a centrally sound income stream.
That sleight of hand works, sort of, as long as those property values keep climbing and the voters remain supportive of broader community concerns. But Austin is hardly immune to the housing bubble now bursting all over the country. And if you want to see the limits of council's cut-now, tax-later approach to budgeting, just watch the next few weeks of budget hearings and the steady stream of citizen concerns and real public needs that will certainly go begging.
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