City Manager Will Present His Proposed Budget

Community groups begin fight for more equitable budget

City Manager T.C. Broadnax (photo by Katherine Irwin)

Next week, City Manager T.C. Broadnax will make his first major public appearance since starting his job as the city’s top leader in May, when he presents his proposed budget for the city’s next fiscal year.

It may not sound like a flashy event, but historically, the annual budget presentation is one of the venues where the city manager can speak directly with the public about how they think the city should invest in services and programs over the next year. For a position that is mostly behind-the-scenes, presenting the budget can be a rare moment in the spotlight for a city manager.

Unfortunately for Broadnax, he is not going to have much good news to report if the financial forecast city staff and consultants shared with City Council in April holds. Headlines coming out of Broadnax’s first-ever budget presentation, set for July 12, will likely focus on the budget deficit looming over the city, expected to hit $13.2 million with the next budget and grow to $59.9 million by fiscal year 2028-2029.

The projected deficit is primarily a result of constraints placed on local governments by the Texas Legislature. In 2019, state Sen. Paul Bettencourt, R-Houston, championed a bill – which eventually became law – that caps the amount by which cities, counties, and school districts can increase their property tax rate without holding an election. Since property taxes account for the lion’s share of funding that makes up the city’s General Fund (the big pot of money that pays for stuff like public safety departments, libraries, and parks), the state-imposed constraints have meant that local governments aren’t able to generate as much money year-after-year to accommodate the increased demand for services caused by population growth.

And Austin has not stopped growing since the Lege acted in 2019. The financial impact has been delayed, though. Massive amounts of federal stimulus money funneled to local governments to help deal with the COVID-19 pandemic combined with invigorated consumer spending which increased sales tax revenues helped insulate the city from feeling the full effects of property tax caps, but the stimulus lifeline is expiring and sales tax revenues are softening.

This situation, as staff wrote in an April 15 memo, “renews concerns about an underlying structural imbalance between the rising costs of providing the city’s core services and its ability to generate sufficient revenue to pay for them.” Council will need to engage in “serious policy discussions” about remedies, including “periodic” tax rate elections (like the kind Austin ISD and Travis County elected officials recently voted to place on the Nov. 5 ballot). Another partial fix is “bending the city’s cost curve” (i.e., cutting costs) if a tax rate election is not in the cards.

What Do We Want?

Meanwhile, more than 41 community groups have begun rallying public support and lobbying Council offices to include $79.5 million worth of programs and investments that they say will address problems throughout the city that the manager’s budget doesn’t. Dubbed the “community investment budget,” the asks include $10 million for the city’s rental assistance program (staff estimates the program’s current temporary funding will help roughly 1,900 Austinites make rent this year), $2 million for maintenance and safety improvement at parks, $4.5 million to bolster the city’s inclement weather sheltering system, and $250,000 to provide logistical support to Austinites seeking abortion care (such as paying travel costs for people seeking care outside of Texas).

“It is time to say yes to equity.” – Austin Area Urban League’s Yasmine Smith

As always, limiting the growth of the Austin Police Department’s budget will be another goal for this group of organizations. Not just because, broadly speaking, these groups prefer addressing public safety through means other than police – but because state law makes it illegal for cities to reduce their police department budgets (unless the governor permits it). In a tight fiscal environment, that means every new dollar given to the police department carries added weight.

Currently, APD accounts for about 35% of the city’s General Fund and the department is hoping to secure another $4.8 million for new positions and other needs. Notably, those positions are for 911 call takers and dispatchers – not sworn officers. A policy implemented by former interim City Manager Jesús Garza prohibits departments from asking for new positions if their vacancy rate for those positions exceeds a certain threshold – as of now, APD has about a 19% vacancy rate for officers. The Community Investment Budget coalition says that Council shouldn’t give APD the new funding for the civilian positions either, though. They should just reclassify some of the vacant officer positions to free up room in their budget.

It’s an admirable list of demands, and though the full suite only accounts for about 5% of the city’s General Fund, many of the requests will not be fulfilled. With the last budget, Council members added in about $10 million worth of amendments, and most of those changes were informed by the advocacy of the same groups who are lobbying Council now. But that was during a budget cycle when the macro economic environment was less ominous.

Austin Area Urban League’s Yasmine Smith – one of the Community Investment Budget’s architects – said advocates intend to push Council to take a “yes, and” approach with this budget. “Our city has enough money to handle the practical logistics of running the city and it has enough money to make sure that vulnerable populations are seen while they are doing so,” Smith said at a June 12 press conference. “We have said yes to policing and it is now time to say yes to ... emergency rental assistance, to forensic nursing, [and] to mental health response. ... It is time to say yes to equity.”

Editor's Note Monday, July 15, 11:32am: This story previously stated current funding for the city’s rental assistance program would help 6,000 Austinites make rent this year. That is incorrect; while about 6,000 people met preliminary eligibility requirements, the program only has enough funding to serve roughly 1,900 people. The Chronicle regrets the error.

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