Council: The FY 2018 City Budget
Maintain and sustain
FY 2018 Budget: Maintain and Sustain
In a Wednesday morning work session, City Council got its first formal look at the city manager's proposed fiscal year 2018 budget. There were no major surprises from the spring budget preview, when budget staff anticipated that "costs are expected to rise about 5%, and incoming revenue is anticipated to rise by less than 5%" ("City Budget: Something's Gotta Give," May 12). At the time, interim City Manager Elaine Hart told Council, "We're forecasting a slower pace of growth for the Austin economy compared to recent years."
An approximate indicator of the slowdown is the city's sales tax income, which had until recently been rising at about 5% per year – for 2018, budget staff is anticipating growth of only 3%. That – and other similar indicators – means Council will be left with little wiggle room for new initiatives at budget adoption time (late August/early September). As Hart also told Council in May: "We're ... facing significant challenges in developing next year's General Fund budget, being able to balance the needs of our community with our available resources."
Accordingly, Deputy Chief Financial Officer Ed Van Eenoo described Hart's budget focus for the new fiscal year as "maintaining existing service levels and minimizing fee and tax rate increases." As drafted by the budget staff, there will be few new programs, and the only departments showing significant increases are Development Services (which expects to recoup most of the new spending through increased user/permitting fees) and the Fire Department (which continues to need additional overtime funding pending new cadet hiring).
There are also a couple of "known unknowns" shadowing the budget process: 1) All three public safety unions are negotiating new contracts, and any associated payroll costs won't be known before mid-August at the earliest; 2) the Legislature is considering new restrictions on municipal taxing authority, and the city must presume the worst – a reduced property tax cap beginning in FY 2019 – increasing the pressure now to go to the current rollback rate (8% increase) as a cushion against future funding limits.
As proposed – i.e., subject to Council approval – the big numbers include:
• FY 2018 "All Funds" budget (inc. enterprise departments): $3.9 billion
• "General Funds" (operating) budget: $1.03 billion
• Civilian employee wage increase: 2.5% (public safety TBD)
• "Living wage" floor, full-time employees: $14/hour ($15 by 2020)
• Median value home: $305,510
• Tax & fee increase ("typical," median-value home): 4.6% ($14.81/month)
• Proposed property tax rate: 44.51 cents/$100 (8% increase, or $9.84/month)
• City property tax bill as percentage of median family income: 1.6%
If Council adopts the city manager's budget essentially as proposed, budget staff anticipates about $5 million being available for Council's expressed "Strategic Outcome" initiatives – programs ranging from public health to new fire stations to additional police officers. Five million dollars will not stretch very far on that list.