Budget Buzz

The city's proposed 2010 budget continues to come into focus as higher-than-expected property values and an extra $1 million transfer from Austin Energy free up cash that will likely salvage service incentive pay and prevent employee furloughs.

Saving service incentive pay – the bonus program rewarding longtime city employees – has come to dominate budget talks. Council Member Sheryl Cole said, "We need to make SIP a top priority," earlier this week, hoping better-than-expected sales tax and property tax revenues could close the gap. "I've said the same thing before myself," says Mayor Lee Leffingwell. "The assumptions that we use to determine what our revenue is going to be are looking better than they were a few months ago." For example, current projections have sales tax sliding 10% below last year this fiscal year, with an additional 5% slide next year; however, June sales tax figures came in better than previously estimated. "There's a lot of thinking now it may not be that bad," Leffingwell says. Still, he says, "We need to be conservative in our assumptions." The mayor faces a challenging balancing act, as he publicly made saving the SIP program and shelving furloughs top budget priorities – along with trying to reduce the proposed property tax rate. (The SIP program costs the city's General Fund $1.65 million; furloughs would have saved another $720,000.)

The City Council received welcome news in a budget work session this week, when the adjusted tax roll from the Travis Central Appraisal District came in at $80.2 billion total taxable value citywide – 5% higher than previously estimated – which would in turn produce an additional $644,000 in property tax revenues. The numbers mean that next year's proposed property tax rate of 43.28 cents per $100 valuation can be cut to 42.09 cents, while bringing in the same revenue as originally estimated. That, plus an additional $1 million transfer from Austin Energy (due to windfall profits this hot summer), lead the budget office to propose restoring SIP in the 2010 budget and to recommend no furloughs for employees making less than $40,000. In six months, the furlough program will be re-evaluated, but only for those higher-paid employees. Additionally, the city's looking at rolling back proposed increases to utility bills.

Having heard from Austin Energy, Austin Water Utility, Solid Waste Services, and the Aviation Department, council receives briefings Aug. 26 on the Austin Convention Center, Public Works, Transportation, Watershed Protec­tion, and Economic Growth and Redevelopment Services. Public hearings on the budget are scheduled for council meetings Aug. 20 and 27, while the formal adoption process is scheduled to begin Sept. 14.