What Do Austinites Want?
10-1 City Council wrangles its first budget
It's a largely unquestioned presumption of all city budget discussions that "the taxpayers" don't want to spend any more money. Indeed, the most prominent public pressure at budget time – on the City Council dais and off – is to "hold the line" on any budget increases, especially any increase in the property tax rate. That was a common refrain during early August Council work sessions, with Mayor Steve Adler, echoed by several Council members, reiterating that one goal of the process would be to "find a way to frame a budget that will not require any increase in the property tax rate."
As far as it goes, that's conventional wisdom. Yet it's also worth recalling that when Council was installing the coming year's 6% homestead exemption on property taxes (in advance of the actual budget work), the mayor said his preference was for staff to propose a budget that would pay for the exemption with a property tax rate adjustment that would not require any reduction in city services. City Manager Marc Ott's budget staff duly prepared a budget that includes a rate adjusted from the springtime forecast to accommodate the 6% exemption – and immediately, the grumbling began. The spring forecast anticipated a 47.59-cent rate per $100 evaluation; the rate in the proposed budget bumps it to 48.14, specifically to defray the $6.3 million cost of the initial exemption (with the expectation it will rise incrementally to 20%).
The tax rate represents about 30% of the proposed "Changes in Rates and Fees" that are under budget review (see "Are You Typical?" Aug. 7). The total comes to an estimated increase of $11.30 per month for the "median value homeowner," of which $3.32 represents property taxes – an increase of 3.6% on the median bill. (For the record, the spring forecast included an estimated increase of $18.11 per month. Yet at the July 30 rollout, city staff did not hear any praise for cutting the increase by more than a third. Instead, the mayor grilled staff on whether they hadn't overestimated this year's water usage, thus raising the anticipated bill.)
Setting aside those nuts and bolts for the moment, is it in fact true that Austinites are unwilling to pay more to underwrite city services, and that because "affordability" has reached a tipping point, the quickest and most direct way to address that problem is to cut city spending?
Not, apparently, if you actually ask Austinites. Every year, the city surveys (via phone, mail, and online) a broad cross section of citizens about the quality of city services. For the record, this year's survey continues to reflect that residents are mostly quite satisfied with overall city services, with the glaring exceptions of "traffic flow" and "growth planning" (see "Citizen Survey Results").
In recent years (under Ott's management), the city has also created a "Budget in a Box" exercise (in person and online) that enables residents (individually or in neighborhood or community groups) to consider the budget as a whole, and to craft their ideal budget for the coming year. It's a sort of game-board process in which participants distribute a given amount of stickers representing available funding to the wide range of city services: Emergency Response, Parks and Libraries, Streets and Infrastructure, and so on. Hundreds of residents participate in various group forums; this year, another 1,600 took part online (see "Budget in a Box Results").
How did Austinites respond? Across eight categories of services, only a minority said they wanted to cut funding for particular services (the largest percentage – 34% – said they would prefer a 5% reduction in energy costs). Majorities preferred either no change or 5% increases in funding, across the board, in major services. For streets and infrastructure and parks and libraries, very strong majorities advocated more, not less funding – very few people advocated cuts.
Presenting these findings July 30 to a rather skeptical Council, Deputy Chief Financial Officer Ed Van Eenoo added that the results were quite consistent in all 10 districts. That is, across the city, most Austinites are willing to spend more money to expand city services.
Affordable for Whom?
Nevertheless, only rarely will you hear such heresy emanating from the dais. When Library Department Director Brenda Branch made her presentation last week, Council Member Leslie Pool told her that if Pool were "queen of the budget" she would provide sufficient funding to allow Austin's libraries to match peer cities in materials acquisition. Other CMs (Mayor Pro Tem Kathie Tovo, D2 CM Delia Garza, and D5 CM Ann Kitchen) have suggested they'll support increasing social service funding.
But at least initially, the rhetorical energy was captured by Council's conservative wing, targeting "increased spending" in general and a proposed 3% wage increase for civilian city employees in particular. (Public safety employees are governed by union-negotiated contracts, and more highly paid police, firefighters, and EMS staff are currently in pay cycles below 3%.) D6 CM Don Zimmerman has proposed instead a "tiered" pay raise, with the lowest-paid workers – the budget sets a living-wage minimum of $13.03 – getting the full 3%, and the raise diminishing upward to the highest paid employees, who would receive an increase of no more than .801%.
Why that curious percentage? Because, according to the resolution, the U.S. Bureau of Labor Statistics reports that average wages in the Austin-Round Rock-San Marcos Metropolitan Statistical Area rose only by that percentage in the past year. As AFSCME (Municipal Labor Union) Business Manager Carol Guthrie was quick to point out, comparing Austin wages (and cost of living) to the entire metropolitan area is a stretch – "ludicrous" was the word she used – and she added that creating "compression" within the city's wage scales was unlikely to be conducive to high-quality recruitment. Guthrie also noted that another aspect of the proposed budget would raise employees' contribution to health care costs (the city's self-insuring costs are also rising), and the management/employee benefits committee working on that issue was anticipating the wage raise to help defray that cost.
More pointedly, Zimmerman's "tiered" structure (co-sponsored by D8 CM Ellen Troxclair, D10 CM Sheri Gallo, and D1 CM Ora Houston) does not simply reallocate the 3% to what the resolution describes as a less "regressive" pay structure; it reduces the overall amount of the raises by nearly a third ($6 million, across all departments) under the pretense of being more generous to lower-paid workers. Said Guthrie, "I think it is unfortunate that these individuals only want to find savings on the backs of city employees. We're just not going to go there. [These are] good times for the city, city employees work hard, and they all deserve fair compensation."
The resolution was proposed prior to the budget presentations, and hasn't yet been thoroughly aired out by Council. After a discussion at the Aug. 6 meeting, Council appeared poised to reject the resolution outright – instead postponing the full debate to a subsequent meeting, following the budget presentations. But Troxclair has continued to promote the proposal as a dramatic response to the "bigger budget, higher taxes," mantra while repeating the misleading justification that "Austinites as a whole only saw a 0.8 percent increase in their wages last year," thereby stretching the city's boundaries to encompass Bastrop and Luling. Zimmerman and Gallo both stoutly defended the proposal as responding to presumed public demand for budget cutting.
And they picked up prominent allies last week: The editors of the Austin American-Statesman praised Troxclair and Zimmerman's "bold, sensible proposal" as a response to the city's "affordability crisis" – while refusing to notice that many thousands of city employees rely on their wages to live affordably in Austin. The Statesman simultaneously made common cause with the hard-right wing of the new Council while borrowing the rhetoric of "progressive" advocates of affordability, with the traditional conservative refrain: It's always the right time to cut taxes.
Making Ends Meet
Unlike the Statesman, most Council members did not appear ready to acknowledge the visionary nature of cutting employee wages to provide another tax break for homeowners, and it would appear that the proposal will not readily find two additional votes on the dais (and judging from her remarks last week, co-sponsor Houston's vote may well be wobbly). Moreover, despite the daily's annual pandering on property taxes – surprise, nobody enjoys paying them – the public sentiment on the matter appears quite mixed. Based at least on the "Budget in a Box" exercise – more representative of public response than the average Council meeting, and certainly more so than the average Statesman editorial – Austinites appear to be willing to share a portion of their growing equity (and the city's larger prosperity) to continue to build necessary infrastructure, expand opportunity, and mutually create a greater quality of urban life.
There remain plenty of potential flash points between now and the formal adoption of the FY 2016 budget in early September. Although public safety remains high on the list of public priorities, the sheer number of proposed new hires (106 sworn and unsworns positions in all) for the Austin Police Department was giving Council pause last week. The code compliance folks (rebranded "Austin Code") as well as the Development Review team were worked over pretty hard about being more proactive and more successful in enforcement and permitting – both of which, alas, require more funding. Earlier, it appeared that the Library Department – slightly more high-profile than usual, because of the in-progress Central Library and its inevitable staffing – would get a thorough grilling by those few on the dais who consider that project a boondoggle. (Zimmerman skipped that session, telling the Statesman he was instead devoting his office time to finding ways to "spend less money instead of more.")
Inevitably, Council will spend the last couple of weeks of the process trying to find scarce remaining dollars to cover a wide range of unmet needs, especially in social services, and the structural inequities in our otherwise healthy local economy. It's hardly an easy task, but they should take some comfort from the knowledge that what Austinites actually say they want does not necessarily reflect the conventional wisdom about the high cost of city government. The city is home not just to taxpayers, but real citizens.
City Council will begin public hearings on the proposed budget and the various rate and fee changes today, Aug. 20, and again on Aug. 27. The agenda is available on the Council website (www.austintexas.gov/department/city-council/council-meetings).