Point Austin: Follow the Money

There were few surprises in last week's formal presentation of the proposed city of Austin budget. Whether that's a good thing or not remains to be seen.

The numbers were fairly close to the spring projections by the budget office, even a little better. The city continues steadily to rise out of the national recession, and there should be money available for employee raises and to add back a few more programs or services made threadbare by cuts over the last few years.

Some of that flexibility is reflected in the proposals presented to City Council Aug. 1 by City Manager Marc Ott and budget staffers. As proposed (that is, subject to Council approval), the FY 2014 budget would include a 1.5% pay increase for police officers as well as civilian employees (more on that below), as well as certain new programs initiated by Council's midyear 2013 amendments: 24-hour hike-and-bike trails; additional wildfire prevention, upgraded APD forensics; the new civilian civil-service review (approved by Council over management objections); and paid parental leave. As drafted, the budget also maintains the much-debated APD ratio of two officers per thousand residents, and begins a shift in the funding method for affordability housing, in an attempt to stabilize those funds and somewhat insulate them from the volatility of periodic bond votes (which won't be going away).

Budget mavens will also notice increases overall in several departments, a few of which have gotten used to the chopping block in recent years. It's unsurprising, for example, to see a 4.5% bump ($12.7 million) in APD funding; but Parks and Recreation is also recommended for an 8.3% increase ($4.3 million, although much of that reflects assumption of cemetery maintenance), as is the Libra­ry Department. (3.1%, $900,000) – not great, but at least not another reflexive cut. Note that, because of base department funding, a given percentage increase means a whole lot less money for PARD than it does for APD; almost needless to say, public safety (police, fire, EMS) continues to consume nearly two-thirds of the overall General Fund budget.

By the Numbers

These proposals are accompanied by the annual big numbers that represent the scale of the budget, as well as the effects of proposed changes.

• All Funds budget (incl. enterprise departments): $3.3 billion (FY 2013: $3.1 billion)

• General Fund (basic expense budget): $802.6 million (FY 2013: $771.2 million)

• Current (nominal) property tax rate: 50.29 cents per $100 taxable value

• Effective tax rate (same revenue as 2013): 48.43

• Proposed tax rate (0.85 cent increase): 51.14

• Rollback tax rate (would trigger a rollback election): 51.34

Each one-cent increase in the property tax rate represents $8.7 million, and even standing pat (i.e., maintaining the nominal rate of 50.29 cents per $100) would bring in additional money because of rising property values, and under state law is considered a tax increase. City budget staff, which notes that the rate will have stayed below the rollback rate for four years (the previous four years were at rollback) calculates that the proposed increase would mean a $4.17 per month rise for the median-valued, $185,000 home. Proposed city fee increases (primarily water and electricity) would add another $10.22.

That's not quite the end of it; with raises anticipated from other jurisdictions (Travis County, AISD, ACC, Central Health), the estimated annual property tax increase amounts to $238 – reflecting overall roughly 5.6% of the median family income.

By the Arguments

Before you start searching the sofa cushions (or writing your Council members), note that all of this remains to some degree contested territory. In advance of Coun­cil deliberations, controversies are already brewing over APD funding, parks funding, solar energy funding, affordable housing funding, and more simply, "The Taxes Are Too Damn High." And the arguments are not only in one direction: For example, while some Council members (e.g., Bill Spelman, Laura Morrison) will argue that the "two police officers per thousand" standard is arbitrary and we don't necessarily need 47 new sworn officers to maintain that ratio, others (Lee Leffingwell, Sheryl Cole) are likely to argue the opposite, and the APD has requested even more, and the Public Safety Commission just voted to nearly double that recommendation, to 92 new officers. (The commissioners didn't suggest a funding source.)

Similarly, a new coalition of parks advocacy groups ("Greater Austin Parks") is lobbying the city to boost city parks funding another 8% ($4.75 million), and that's only one of $34 million in "unmet needs" city staff identified above and beyond their base budget recommendations. A similar coalition of environmental advocates is asking Austin Energy to more than double its 2020 goal for 200 megawatts of solar power, to immediate backlash from AE General Manager Larry Weis – that's likely a short-term nonstarter, but will remain simmering in the overheated Texas air.

Most prominently, civilian city employees represented by AFSCME have made it clear that they believe the recommended 1.5% raise is inadequate, and they believe a more equitable figure is 3%. City management and the budget office have described that as "unsustainable" now or over the next few years, but at the first budget work session at least a couple of Council members said they were willing to consider ways it might be accomplished.

Shake hands, and come out fighting.

The next Council budget work session is scheduled for Aug. 14; departmental budget video presentations are available on the Financial Services website (www.austintexas.gov/financeonline/finance/main.cfm).