A legislative hearing broke out at City Council’s budget work session Wednesday morning. The occasion was the formal presentation of the city manager’s proposed budget, during which Deputy Chief Financial Officer Ed Van Eenoo (aka “The Budget Guy”) focused briefly on the spiking effect of state public school recapture over the last several years – specifically noting that for Fiscal Year 2018, while Austin ISD property taxes continue to increase because of recapture (aka “Robin Hood”), the district will actually be keeping less revenue than the year before.
That decline dates from 2014, when a typical tax bill (on a median value home) generated $2,032 for AISD. Although the overall residential tax bill – driven primarily by school taxes – continues to rise, in FY 2018 AISD will retain only $1,965, while returning $1,378 to the state for redistribution. Simultaneously, the typical overlapping tax bill (city, school district, other jurisdictions) has risen from $4,653 to $6,070. (About $190 of that four-year, $1,417 increase is in city taxes.) And the state’s 2018 bite of property taxes – $1,378 – will for the first time exceed the city’s, anticipated at $1,251.
The implication was not lost on Mayor Steve Adler, who delivered a statement that read, in part: “So to be clear, property taxes are no longer a local property tax. From this day forward, let’s call it what it really is. Ours is a state property tax. And the recent increases by the state of property taxes has been extreme, geometric, and irresponsible. … The state’s take is growing five times faster than city property taxes. …
“Yet in this Alice in Wonderland world, state leaders are blaming local governments for their property tax increases. … If the Legislature wants to do something about increasing property taxes, they need to fix our broken school finance system. …”
Who’s Robbin’ Who?
The mayor’s outburst triggered a predictable response from District 8 Council Member (and sole Republican) Ellen Troxclair, who argued that city budget policies promote local “Robin Hood” redistribution – e.g., for affordable housing and other programs – but the mayor complains when the shoe is on the other foot. She also described Austin as “one of the most egregious violators of the insane increases that we’ve seen in our taxes.”
Adler responded that Austin’s property tax rate compares favorably to those of other major Texas cities, then recalled his own efforts (as a Senate aide in the Nineties) to adjust the school funding formulas that hadn’t (and still haven’t) changed since the Eighties and underfund Austin schools. “Seventy-five percent of the property tax increases come from public schools,” Adler reiterated, “while AISD gets fewer dollars than they were getting four years ago.”
With the gate open, several other CMs – Kathie Tovo, Pio Renteria, Delia Garza, Ann Kitchen, Jimmy Flannigan, Ora Houston – echoed the mayor, so that Troxclair finally shrugged, “I presume that you all say ‘ditto’ – everybody doesn’t have to all chime in.” But she challenged Adler to commit to lowering the proposed property tax rate – staff-anticipated at the current 8% rollback rate – should the Lege fail to pass the threatened additional restrictions.
Upside-Down Government
We shall see. The conversation perhaps stiffened the Council majority’s determination to defy the latest Austin-bashing wave at the Lege – “This is an ongoing assault on Austin,” said Renteria, “and especially the poor and people of color” – but the locally outnumbered Troxclair can rest secure, knowing that the numbers are nearly reversed at the Capitol, potentially making her a Council majority of one. In most of this year’s legislative hearings, witnesses against bad bills – defunding Planned Parenthood, policing bathrooms, targeting trees, squeezing city funding, etc. – generally outnumbered bill supporters by sizable margins. That had little effect on the outcome, especially in Lite Guv Dan Patrick’s Senate. The bad bills pass easily, with the remnant of good sense on the House side, represented by Speaker Joe Straus, remaining the last defense against right-wing fanaticism.
Faced with the imbecility emanating from the Capitol, Council is hoping to adopt a budget that will, in City Manager Elaine Hart’s words, “maintain services while minimizing costs” – but which presumes an 8% rate increase (with no additional homestead exemption) in part because the Lege is threatening to restrict cities’ ability to raise funds going forward, with an automatic 5 or 6% rollback election trigger (yet another unfunded mandate). If that happens, future Councils will find themselves increasingly unable to maintain basic services, and can forget about any expansion of affordable housing or public health initiatives, or even about repairing those 50-year-old swimming pools that neighborhoods are suddenly worried about losing.
While the city waits on the other Lege shoe to fall, we can all contemplate our current political predicament: a federal government imposing federal responsibilities (immigration, climate protection, etc.) on states, while state governments impose state responsibilities (public schools, infrastructure, environmental protection) on cities, counties, and school districts, while denying them the funds to fulfill those responsibilities. An Alice in Wonderland world, indeed.
This article appears in August 4 • 2017.
