Point Austin: The Budget Wrangle Resumes
City Council tries to spend more, cost less, and ... sustain services
City Council's plate certainly overfloweth. They've returned to work this week with a lengthy to-do list, beginning with the Tuesday work session, Wednesday's all-day budget work session, and Thursday's (Aug. 4) regular agenda, the first of several similar weeks. While they wrangle the FY 2017 budget, with the other hand they're prepping the November mobility bond, hoping to get that squared away by mid-August and leave a little less than three months for a public campaign.
While the bond remains a roll of the November dice, the budget is the annual headache and task that most marks a council's approach to public priorities. An early indication of this 10-1 Council's expectations was its grudging vote to expand the 6% property tax homestead exemption (adopted last year) to 8%. Warned by city staff to expect a tight budget year, they were reluctant to make it tighter than would the $3.8 million hit created by the 2% increase – but still wanted to pursue the tax cut. The 8% exemption means they began work with $15 million less available, before they've even looked at what "available" means.
This month, they're taking a closer look at "available," and the early responses around the board and commission tables vary. At the close of the July 27 work session that first introduced the budget, Council Member Don Zimmerman balked at Austin Water's capital improvement plan, which calls for spending roughly $545 million (in debt and cash, over several years) to maintain and upgrade facilities like the Davis Treatment Plant – and accused the AW management of "circumventing the law" that requires voters' approval of new debt. "In short," Zimmerman told Director Greg Meszaros, "it's illegal." He was quickly contradicted by Mayor Pro Tem Kathie Tovo, but promised to return to the argument in due course.
This week, Zimmerman expressed his disdain for an endangered Tovo proposal to provide public toilets Downtown by suggesting they could be signed to prohibit guns and gambling. "If it's a gun-free zone, and a no-gambling zone," he conjectured, "there'll be no excuse for anybody going in there to shoot craps." The presumed joke evoked dead silence from his audience.
On a more serious note, CM Delia Garza has repeatedly expressed her concern that the proposed budget has left little room for increases in social services, as contemplated by this council last year. Following the July 27 rollout, she joined advocacy groups pressing for a continued commitment this year. Pointing to a 2014 study reflecting that Austin is spending less than its peer cities on health and human services, she recalled that the current council committed to a steady increase over 3-5 years and noted that the proposed budget includes about half the $8.3 million needed to keep pace.
Meg Poag of the One Voice Central Texas coalition made the cost-saving argument: "Every $1 invested in early childhood services provides $4 to $9 in benefits; diverting a young adult transitioning out of foster care from the criminal justice system saves $2.5 million in incarceration, arrest, and other costs; $37,000 is saved annually for each individual premature institutionalization in a publicly supported nursing home."
Looking at the raw budget numbers, Garza's hopes and Poag's calculations are likely to land on arid ground. The proposed budget does make gestures at responding to those needs (including another increase in the elderly and disabled exemption), but staff is constrained at the top by the property tax "rollback rate" (the state-mandated limit for tax increases without an election) and now at the bottom by the annual homestead exemption – and within those limits, there's precious little wiggle room for adjusting the allocations.
Only the Beginning
All this is setting aside many other spending pressures – deferred maintenance, technology upgrades, health insurance, employee raises, etc. – and most prominently for the "public safety" funding that now devours more than 70% of the General Fund budget. APD Chief Art Acevedo is requesting more than 100 new officers; the budget proposes about a third that many, and both the police union and the Public Safety Commission are pressing for more officers and more expensive equipment.
That doesn't even account for the counter-pressure (on Council as elsewhere) that the city needs to "live within its means" and not raise additional revenue at all, but continue with the same size budget as last year – while the population and costs continue to grow. I'd feel more sympathetic for a council caught in that whipsaw if it had not already implicitly accepted, with its embrace of a growing homestead exemption, the essentially Republican argument that property tax cuts are the road to affordability.
Budget staff did report Wednesday morning that a just-corrected calculation from the Travis Central Appraisal District appears to reflect a couple million more in potential revenues. From the look of things thus far, we're certainly going to need it.