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!

—————————————————————

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.

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