Point Austin: Priority Problems

So what are Chronicle readers most worried about today? Nuclear annihilation, global climate disaster ... or higher property taxes?

Those seem to be the headline choices before us this week. We've elected a president who responds to madman nuclear threats from North Korea by echoing them. U.S. scientists are telling us – once again – that human-caused climate change is very real and increasingly threatening, and those scientists are worried that the response of the U.S. government will be to ignore or suppress the research rather than take corrective action.

Since most us feel frighteningly helpless about responding to those two very real historical crises – at least we can fret mightily about property taxes. That was also the task of City Council members Wednesday morning, as they considered a budget staff presentation of a potential "tax swap" with Austin ISD, a process under which the city would raise its fiscal year 2018 property tax rate in order to allow the school district to lower its rate as well as its "recapture" obligations to the state – thus in theory enabling an overall reduction of the property tax burden on local residents.

It's a very tentative proposal, with many moving parts, and was up for discussion at the work session only because under state law, Council has to set its theoretical "maximum" property tax rate at least a month in advance of adopting an actual rate. And Council had previously directed staff to do the research, bring a proposal to Council, and allow Council to review and discuss the idea to determine if it's actually feasible and effective. Council did finally vote to set the maximum at two cents above the current rollback rate – creating the potential that the overage could be used (if Council eventually determines) to mitigate AISD's property taxes while providing education benefits to district ­students.

A Long Shot

That's the polite summary (see "Could Tax Swap Make the Cut?," p.13, for more details), but Council reacted, frankly, as though somebody had just seen a rattlesnake. The vote was 6-4 to approve the maximum, but the four opponents (Ora Houston, Delia Garza, Jimmy Flannigan, and Ellen Troxclair) were adamant, and several of the majority votes were so tentative as to barely qualify as yeas. Mayor Steve Adler reiterated that all they were voting to do was to consider a proposal – that he himself as yet takes no position on – and insisted that if the deal wouldn't work to lower the overall property tax burden, it should be rejected.

Nevertheless, Troxclair predictably denounced the plan as another tax-grabbing outrage, while a bit more surprisingly, Houston said it would hurt elderly homeowners or their heirs. Garza said her Southeast constituents would also be threatened, and Flannigan added that even considering the idea as a short-term fix would be a mistake. Other members (notably Ann Kitchen) who voted for the proposed maximum emphasized it was only for purposes of discussion, and unless they could be firmly persuaded of the plan's efficacy, their eventual votes would be nay.

The hesitations are understandable. Austin in fact includes seven school districts (e.g., Flannigan's District 6 is mostly in Round Rock ISD, Garza's D2 has Del Valle, Houston's D1 has Pflugerville), and while only AISD would be a direct property tax beneficiary, the current proposal contemplates proportional recompense to those districts in some not yet defined form. Also, senior homeowners enjoy an AISD tax freeze, but not one from the city – and the city's senior/disabled exemption would therefore have to be adjusted if most seniors were to be "held harmless" under the swap.

And even if council members might be convinced that the idea makes sense – audibly a long shot Wednesday morning – a petition-triggered rollback election appears inevitable, and a divided Council would be tasked with convincing voters, "In order to lower your property taxes, we have to raise them."

Hurry Up and Wait

That would be a very tough sell, and the guess here is that the tax swap is an idea (or a desperate local gesture) whose time has not yet come. The mayor's call for Austin to be "creative and innovative" is inspiring, but hoping that the city and school district budget staffs can make all these numbers work in a financially viable (and politically salable) solution looks like a bridge too far.

The projected mountainous increases in AISD's recapture payments – as a "property rich" district educating a majority of students who are in fact poor – are entirely unsustainable, but the GOP-dominated Legislature continues to show no inclination to address the school finance crisis in any serious way. Perhaps a few school district bankruptcies, or once again the courts, will finally force them to abandon bathroom policing and do their constitutionally mandated job.

Or perhaps not. No one ever went broke betting against the sanity, the maturity, or the responsibility of the Texas Legislat­ure. I'd like to think this time it's different ... but y'all feel free to resume worrying about climate devastation and nuclear Armageddon.