Monthly Archives: March 2014

How To Open Your Tax Appraisal Notice

By Bill Oakey – March 26, 2014

Within just a matter of days, something will happen all over Austin that must be approached with utmost caution.  That thump and rustling sound that you hear outside your front door could evoke a cold sweat and the starkest feeling of sheer dread and fear.  “Could it be out there today?” you might wonder.  “Was that really the mailman, or just a bird trying to make another nest?”  “Should I actually go out there and look?”  “Do I have to?”

All of those are perfectly legitimate questions.  But sooner or later, you are going to have to open that door.  You are going to have to stick your hand in the mailbox, and find out if this is the day that you were hoping  would never come.  But I have a few suggestions that might help you get through the process.  There may be a way to do it and remain in one piece.

1. With any luck, the “bad envelope” will be buried inside a bundle of junk mail.  Grab the bundle and squeeze it tightly, so that you can take everything inside without looking at the envelopes.

2. Once your are safely inside the house, it’s OK to look through the envelopes.  But make sure you are sitting down first.

3. If you even think you see an envelope from the Travis Central Appraisal District, don’t open it right away and don’t panic!  Take a few deep breaths and look at the envelope again.  Make absolutely sure that you saw what you think you saw.  Our brains can play tricks on us sometimes.

4. If you are positively certain that what you are holding really is your tax appraisal notice, then you will have to make another decision.  When and how are you going to open it?

5. My advice is definitely not to do it alone!  If your significant other is not home yet, wait until you can share the memorable experience together.

6. If you don’t have a significant other, or if he/she is out with another significant other, just call a good friend.

7. Depending on your situation, you might want to pour a glass of wine or have some medication handy if needed.  I’ve always heard that aspirin is good for a stroke.

8. If the battery is low on your phone, plug it in.  You might need to call 911.

9. When you and at least one other supportive person are sure you are prepared, go ahead and get ready to open the envelope.  Do not attempt it with a sharp object like a knife or a letter opener.

10. Open your tax appraisal notice.

Sorry, I can’t help you any further.  We will all miss you when you leave.  Take those fond memories of Austin with you, and come back and see us sometime!

Tax Victory For Seniors And Disabled Homeowners!

By Bill Oakey – March 21, 2014

Yesterday, the Austin City Council voted 5-2 to give seniors and disabled homeowners a long-overdue increase in the Over-65 Homestead Exemption.  They increased the exemption from $51,000 to $70,000.  So, now the City of Austin and Travis County wil both offer the same $70,000 exemption.

Now for the question that a lot of people are asking.  How much money will this save on your tax bill?  The answer is really simple.  The increased savings is $95.51 per year, under the current tax rate.  And it doesn’t matter what your home appraisal is.  The entire $70,000 exemption reduces your taxes by $351.89.  To do the calculation, just take $70,000, divided by 100, which is $700.  Then multiply $700 times the current tax rate of .5027 and you get $351.89.

We have five City Council Members to thank for this victory.  They are the two co-sponsors, Laura Morrison and Mike Martinez, along with Kathie Tovo, Mayor Pro Tem Sheryl Cole, and Chris Riley.  Change does not come easy at City Hall.  And if I learned anything from this experience, it is this.  There is no form of trench warfare more brutal than the fights over funding issues!  People will put their hearts and souls on the line to compete for projects during the budget cycle and throughout the year.

A crucial final vote at a City Council meeting can be like a football game.  You may think you know the odds going in, but you really don’t.  In this case, it is safe to say that it went right down to the wire.  I would especially like to thank Council Member Kathie Tovo, and her Policy Aide, Shannon Halley.  Their dedication, patience, and responsiveness to emails and phone calls really helped make the difference!

For those who are wondering, the Over-65 and Disabled Homestead Exemption had not been adjusted since 1986, when Ronald Reagan was President.  We have good reason to celebrate!

City Of Austin Short-Changes Senior Homeowners

By Bill Oakey – March 20, 2014

UPDATE: Austin seniors and disabled homeowners won a major victory today!  Their homestead exemption was increased from $51,000 to $70,000.  The vote was 5-2 at the City Council.  More details in a new blog post will be coming tomorrow.

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Posted Earlier:

Today the Austin City Council will once again debate a possible increase to the over-65 and disabled homestead exemption for property taxes.

In yet another sad affordability statistic for Austin, we have the lowest over-65 homestead exemption among the largest cities in Texas.  (See the chart of cities at the end).

And to make matters worse, it is well known that Austin has the highest real estate property values in the state, which further adds to the tax burden for seniors.  The issue for the City Council is how to evaluate the budget impact of increasing the exemption.  But, whatever it takes, it seems long overdue for many seniors, such as retired teachers and State employees, who have not received a cost of living increase since 2001.  Thousands of others are living on fixed incomes as well.

Here is the list of over-65 exemptions for the 2013 tax year:

Austin – $51,000

Source: http://www.traviscountytax.org/goPropertiesRatesExemptions.do

Houston – $80,000

Source: http://www.hcad.org/resources/jurlist.asp

San Antonio – $65,000

Source: http://www.bexar.org/tax/PropertyTaxRates2013.html

Dallas – $64,000

Source: http://www.dallascad.org/TaxRates.aspx

Once again, it’s time to email, tweet, and Facebook your friends and ask them to let their voices be heard.  Use this easy one-click email link to all 7 City Council Members.

Taxpayers’ Victory At City Hall – Your Voices Helped Make The Difference!

By Bill Oakey – March 18, 2014

Today the Austin City Council did not vote to spend any of the $14.2 million budget surplus.  By the time of the 9:00 work session, there was only one spending item left on the table that was directly tied to the surplus.  That was Council Member Chris Riley’s $200,000 item to fund a land use study for the South Shore of Lady Bird Lake.  He withdrew that item and left open the option to possibly bring it up later.

Mayor Lee Leffingwell opened the meeting with a spirited appeal to the Council not to spend the surplus.  In fact, he spoke against the idea of the spending items being placed on a work session agenda.  Instead, he called for a more transparent process with public input and fair competition between competing priorities, like they have during the regular annual budget process. The mayor also opposed spending last year’s surplus, but he was outvoted.

Council Member Kathi Tovo emerged as an outstanding example of applying due diligence on behalf of the taxpayers.  Although she initially considered using some of the budget surplus to fund a worthy project at a senior recreation center, she worked with City staff to find another funding source.  The project can be funded with money available from voter-approved bonds.

But, as it turned out, none of the proposed projects that Council Members had earmarked to be paid for with the budget surplus got approved today, even the ones that can have been funded from other sources.  The order of the day was to delay action until a clear policy for any type of budget amendment can be adopted.

There was a revised budget amendment policy on the agenda today, but that was included in this blogger’s request for a delay as well.  There are some worthy elements in the proposal, but there is also a giant loophole that needs to be plugged.  Thankfully, the City Council voted to postpone action on the policy until April 10th.  I hope to meet with the Mayor and some of the Council Members before then to recommend some improvements.

Those of you who are following the affordability issue and bringing your friends onboard are helping to make a difference at City Hall.  Your emails to the City Council have been noticed, and that fact was even alluded to at the meeting today.  All I can say is please keep it up!.  If you ever wondered what the official City of Austin Organization Chart looks like, I will give you a little hint. Guess who is at the very top of the chart?  Guess who is higher than the City Manager and even higher than the City Council?

WE ARE!  We, the people.  And, hey, don’t you ever forget it!

You Can Help With One Click – Stop The City Council From Spending The $14.2 Million Budget Surplus!

By Bill Oakey

March 16, 2014

Taxpayers across the City still have time to stop the Tuesday vote by the Austin City Council to dip into the $14.2 million budget surplus and start spending it.  If they follow last year’s procedure, nearly the entire surplus will be gone, even if they don’t spend it all this week!

Email All 7 City Council Members With A Single Click:

mailto:Kathie.Tovo@austintexas.gov, laura.morrison@austintexas.gov, Mike.Martinez@austintexas.gov, chris.riley@austintexas.gov, sheryl.cole@austintexas.gov, lee.leffingwell@austintexas.gov, bill.spelman@austintexas.gov

You can either use your own words, or simply copy and paste these two requests that we will be making at the Taxpayers Press Conference on Tuesday morning:

1. Please delay beyond this week any action on spending the budget surplus, or on establishing a policy on budget surpluses, to allow more time for public input.

2. Please make a unanimous commitment not to spend any of the budget surplus.  Send a clear, positive message to the community on fiscal responsibility and affordability.

What Else Can You Do To Help?

Forward this blog posting to all of your email contacts, all of your Facebook friends and Twitter followers.  Then, hang onto to your wallets and purses and hope for the best!  Ask your friends to follow this blog for the latest updates and action alerts on Austin affordability issues.

What Is The City Manager’s Recommendation?

City Manager, Marc Ott, recommended to the City Council not to spend the budget surplus!  Instead, he recommended leaving it in reserves, or applying it to next year’s budget to provide property tax relief.

Do We Know Where Each City Council Member Stands?

Not for certain, yet.  But each of them will be sent an email inquiry early Monday morning.  This blog will post their responses, or any lack of responses, after the close of business on Monday.

The Painful Truth About the City Budget Process

By Bill Oakey

March 14, 2014

In just a few short weeks, the City of Austin will begin an annual event that is not as much fun as SXSW or hunting for Easter eggs.  But it’s not without a fair share of drama and intrigue.  Like it or not, here it comes.  30 years is a long time to be ensnared in the budget process as a financial watchdog.   During that time I have learned a few things that you might like to know.

There is a method to the madness.  I will keep it as simple and as brief as possible because some of you need to get to work so you can pay your property tax bills.  Here goes:

1. The City has posted an online training guide that you can read.  It is called “Adopting A City Budget and Property Tax Rate Training.”  Check it out at: http://texascityattorneys.org/2013speakerpapers/RileyFletcher/BudgetAndTax_LeelaFireside.pdf

2. Here is the most important section, quoted verbatim, beginning at the bottom of Page 5:

“The mechanism Austin uses to set the process in motion is an item on Council’s agenda for a resolution to adopt a proposed maximum tax rate that the city will consider and set the date that council will consider adoption of the actual tax rate.”

“In the resolution adopting the proposed maximum property tax rate, Austin adopts the highest rate that keeps us below the trigger for citizens to take action to roll back the rate. Council then can consider various budget scenarios in the upcoming months that may lower the rate needed to generate the revenue for the upcoming fiscal year’s budget, but they know the cap and the cap is public. A sample of this resolution is at http://www.cityofaustin.org/edims/document.cfm?id=141378

“When we adopt this resolution, we make clear in agenda notice, and in statements made by the Mayor at the agenda adopting this resolution, that the council may ultimately adopt a property tax rate that is lower than the maximum set out in the notice.”

3. What this means is that the City Budget staff routinely prepares a budget that uses up most if not all of the money they could get by raising your taxes to the highest level allowed by state law.  And this is done at the very beginning of the budget process!

4. The tax rate that is set at the end of the process is simply the rate that will generate that legal maximum amount of revenue, or very close to it.  The most important thing to remember is that the tax rate is nothing more than a mathematical calculation used to fit the budget.  You cannot compare this year’s rate to last year’s rate.  That’s because property appraisals go up and down.  If the citywide property values go up high enough, the City can have a so-called “zero tax rate increase” and still raise your taxes to the legal state maximum.

5. If you read in the newspaper or hear on TV that the City has something like a “$15 million budget shortfall,” here’s what that really means.  If they cut enough things to eliminate the shortfall completely, they have simply gotten the budget back down to that starting level that will raise your taxes to the legal maximum!

6. There is room for you and your partner on the dance floor at City Hall if you want to experience the event and make public comments this year.  But be sure to bring your Kindle, iPad, or a stack of comic books.  The legally posted 4:00 PM public hearings normally start at least 6 hours late.

7. Oh, in case you were wondering.  How much of a true percentage tax increase do you get whenever the budget is set to the legal maximum?

The answer is 8%.  (See the section, “Effective and Rollback Rates” on Page 4 in the online training guide).

Your actual tax increase would only be 8% if your property appraisal stayed the same as last year.  If your appraisal went up, you cannot be taxed at any more than 10% above last year’s appraisal.  But if you got a huge appraisal increase, the amount above the 10% cap will bite you again next year, up to that year’s 10% cap.

8. If you would like to see both the City of Austin and Travis County adopt a straight forward zero based budgeting plan, please stay tuned.  My top priority for budget reform is to ask them to start the budget process with a plan that keeps taxes at the “zero effective rate.”  Then if they want to increase spending above that level, they would publicize the true amount of any “shortfall” that would occur if those recommended expenditures are not approved.

And the true percentage of any tax increase.  (Tax rates are meaningless, remember?)

The whole truth and nothing but the truth.  Finally!  At long last.  After all these years!

If not by this City Council, then by the (hopefully) grass roots leaders that we elect in November.

Open Letter to the Austin City Council

By Bill Oakey

March 14, 2014

Honorable Mayor and Council Members:

Regarding the $14.2 million budget surplus,

Despite all of the taxpayer anxiety over this issue, there is a very positive approach that would help the City of Austin tremendously.

If the City Council were to vote unanimously to save the budget surplus, it would be a huge morale booster for you and for the entire community!  You have the option to leave the money in reserve accounts, or apply some of it towards a reduction in next year’s budget.

Just take a moment to contemplate the hopeful message you would be sending to the hundreds of thousands of citizens who are deeply concerned about affordability.  You would be sending a message that the City has turned a corner on fiscal responsibility.  The impact of doing that would resonate beyond the city limits.  Even the bond rating firms on Wall Street would regard it as a positive signal.

Please do not turn your backs on this opportunity!  We are all out here watching and anticipating your action on this.  It affects more people in more ways than you probably even realize.  These include small business owners, young workers on low salaries, seniors on fixed incomes, single mothers trying to raise a family, and newcomers considering buying a home in Austin.

For all of the above reasons, and for general sound fiscal principles, I urge you to put aside the wish list of spending items until next year’s budget cycle.  Vote unanimously to accept the City Manager’s recommendation and save the budget surplus.

Please do the right thing for the current and future citizens of Austin!

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Preview of Budget Reform Proposals, Included In My Letter to the City Council

In press interviews, guest editorials, and further communication with City officials and community organizations, I will be asking for budget process reforms.

The primary reform, which is at least 30 years overdue, is to call an end to the misleading use of the term “property tax rate.”  We need to finally adopt a true and honest zero based budgeting process.  In recent years I have succeeded in explaining to many citizens groups that the City staff routinely recommends the highest possible tax increase allowed under state law.  This has been done at the beginning of the budget process.  We know and you know that the tax rate can go up or down because of changes in property appraisals.  The bottom line on tax increases has absolutely nothing to do with the tax rate.  So, a public announcement that “we reduced the tax rate for the first time in a long time,” or words to that effect, is highly misleading.

My reform proposal will require the City to begin the budget process with a revenue assumption based on the zero effective tax rate.  Any proposed revenue increase above that amount would be clearly labeled as such and disclosed to the public.  This would allow the citizens to truly understand the level of tax increase needed to fund the proposed budget. Any amount of increase above the zero effective rate is a tax increase, regardless of whether the new tax rate goes up or down.  It is long past time for the City to publicize the true percentage of any tax increase above the effective rate before, during, and after the adoption of the annual budget.

I am also seriously considering a very radical proposal.  This one would grant citizens the ability to come to a “4:00 PM Public Hearing” on the budget as posted in the legal public hearing notices, and not have to sit and wait for six hours or longer.  I made this proposal to the City Council in the mid 1980’s when Frank Cooksey was mayor (after waiting several hours to speak).  So, the additional 30 years that the citizens have had to wait for this reform is certainly long enough.

If these reforms cannot be adopted in time for this year’s budget process, the issue will be introduced to all of the candidates running for office in November.

Please be aware that I am familiar with these issues because my statewide Truth in Taxation proposal to the Texas Legislature was signed into law by Governor Bill Clements in 1987.

Taxpayer Alert – City Council May Spend $14.2 Million Budget Surplus!

By Bill Oakey

March 13, 2014

Yes, you read that right.  For the second year in a row, the Austin City Council has a budget surplus.  This time it is $14.2 million.  And, just like last year, there is a real danger that the City Council will spend it as fast as they can.  City Manager Marc Ott has recommended that the money be be saved.  And yet, within the blink of an eye, several members of the City Council developed a grab bag of wish list items to spend the money before the printer ink displaying the surplus could even dry.

What you are reading right now is a CALL TO ACTION FOR ALL TAXPAYERS.   If we act quickly, there is still time to call a halt to this midyear spending spree and provide a cushion in the City’s reserves.  Reserves can be used for taxpayer relief or held for improved financial stability.

Last year Mayor Lee Leffingwell was the only person on the City Council to vote against spending the surplus.  But the other members of the City Council need to hear from you as soon as possible.  The fate of the budget surplus could be decided at a City Council work session this Tuesday, March 18th.  Taxpayer advocates have asked for a delay beyond next week, but nothing is certain.

If you belong to any organizations, please send a link to this blog page to all of your members.  Then post it on your Facebook page and send it in your Twitter feeds.  And email it to everyone on your contact list.  This is a non-partisan effort to bring long-needed fiscal responsibility to City Hall.

If you are concerned about affordability and the economic well being of your friends and neighbors, please take the time to email or call each of the City Council members, using the contact information below.  Ask them not to spend any of the budget surplus.  It is time for them to finally get serious and show us that they care about Austin affordability.

Contact for the Austin City Council:

Mayor Lee Leffingwell – mailto:lee.leffingwell@austintexas.gov , (512) 974-2250

Mayor Pro Tem Sheryl Cole – mailto:sheryl.cole@austintexas.gov , (512) 974-2266

Council Member Mike Martinez – mailto:Mike.Martinez@austintexas.gov , (512) 974-2264

Council Member Laura Morrison – mailto:laura.morrison@austintexas.gov , (512) 974-2258

Council Member Chris Riley – mailto:chris.riley@austintexas.gov , (512) 974-2260

Council Member Kathi Tovo – mailto:Kathie.Tovo@austintexas.gov , (512) 974-2255

Council Member Bill Spelman – mailto:bill.spelman@austintexas.gov , (512) 974-2256