Could Tax Swap Address Spiking Property Taxes?

City collab with AISD could aid homeowners

Austin ISD's projected "recapture" payments ($537 million in property tax collections sent to the state for redistribution to other districts) are estimated for FY 2018 to considerably exceed all of the city of Austin's property tax revenues (estimated at $454 million), and to continue to rise rapidly, reaching more than $800 million in FY 2021.

In a Wednesday morning work session, city budget staff presented to City Council a potential "tax swap" with Austin ISD, as a means to address spiking local property taxes as well as maintaining education-related programs that the school district finds increasingly unaffordable, because of the scale of "recapture" payments to the state. In order to continue considering the idea while debating the proposed budget, Council voted to set the theoretical "maximum" property tax rate at 46.51 cents per $100 of taxable value (2 cents higher than the current rollback rate of 44.51 cents).

At this point, the swap is still only a proposal under discussion prior to adoption of the FY 2018 city budget. As described by staff, the city would raise its property tax rate a certain amount – the figure offered for consideration is 2 cents – allowing AISD to lower its rate a corresponding amount, thereby mitigating the amount marked for recapture. Any such levy would almost certainly trigger a "rollback election," and city officials would have to persuade the voters that the increase by the city would in fact result in an overall reduction of property tax payments from city residents.

The proposal was laid out at Wednesday's Council work session because state deadlines require Council to determine and announce the potential "maximum" property tax rate weeks in advance of the formal Sept­ember budget adoption. In a Tuesday briefing for reporters prior to the work session, Mayor Steve Adler acknowledged "there are a lot of moving parts" to a tax swap, and that he has "no position" on the proposal pending staff layout of the details and further Council discussion. He said state law does contemplate tax swaps among jurisdictions, as long as the services contemplated overlap in some way – for example, the city's previous underwriting of parent support specialists and afterschool programs that also benefit AISD. Council has previously directed staff to explore the possibilities, and the legal and financial implications, and this proposal now becomes part of the budget preparation discussions.

"I don't know what the potential dollar amounts are," said the mayor, "and I don't yet have an opinion on whether we should take this step. But we are a creative and innovative city, and we need to consider every strategy to decrease the burden of property taxes."

Adler reiterated that the increasing burden of the "state property tax" is not sustainable, and called again for the Legislature to address public school finance. "The only thing everybody in the state agrees we should do is fix public school finance," he said. "And that's the one thing this Legislature is not doing."

Got something to say on the subject? Send a letter to the editor.

A note to readers: Bold and uncensored, The Austin Chronicle has been Austin’s independent news source for over 40 years, expressing the community’s political and environmental concerns and supporting its active cultural scene. Now more than ever, we need your support to continue supplying Austin with independent, free press. If real news is important to you, please consider making a donation of $5, $10 or whatever you can afford, to help keep our journalism on stands.

Support the Chronicle  

More City Council
Who Will Be the New Council Voice for District 9?
Who Will Be the New Council Voice for District 9?
Eight candidates vie for Austin's most powerful YIMBYs and NIMBYs

Austin Sanders, Oct. 28, 2022

Can Council Get Its Sh*t Done by 10pm?
Can Council Get Its Sh*t Done by 10pm?
Austin City Council addresses a 93-item agenda Sept. 15 and aims to end by 10pm rather than voting to extend the meeting

Austin Sanders, Sept. 16, 2022

More by Michael King
Point Austin: The Abbott and GOP Project Is an Exercise in Brute Political Cynicism
Point Austin: The Abbott and GOP Project Is an Exercise in Brute Political Cynicism
What’s at stake in Texas

June 12, 2024

Point Austin: Everything Old Is New Again
Point Austin: Everything Old Is New Again
The long, honorable history of students “disturbing the war”

May 4, 2024


City Council, Austin ISD, Steve Adler

One click gets you all the newsletters listed below

Breaking news, arts coverage, and daily events

Keep up with happenings around town

Kevin Curtin's bimonthly cannabis musings

Austin's queerest news and events

Eric Goodman's Austin FC column, other soccer news

Information is power. Support the free press, so we can support Austin.   Support the Chronicle