Austin Needs A Budget Affordability Strategy – Can Houston Help Us?

By Bill Oakey – June 16, 2015

Members of Austin’s new City Council have thrown down the gauntlet. They have made it clear in public statements and in Council meetings that they want to protect vital City services, and also make a real impact on affordability in the upcoming budget. That will be a tough hill to climb, so kudos to them for taking on the challenge.

Unfortunately, the one thing that is burned into everyone’s mind (pun probably intended) is the recently-retracted Staff suggestion of closing down a fire station. As an Austin resident since 1971, I can recall many times during economic downturns when the City kept the budgets lean. Taxes did not shoot up in those years, and I don’t recall that City services suffered irreparable damage. I contend that 2015 is one of those years when the City should hold the line once again. Austin’s current “boom” does not help the people on the wrong side of “the most economically segregated city in America.” But the question circles back to this: What cuts from what parts of the budget?

Scale Back On City Employee Pay Raises

I don’t believe that we can afford to give large across-the-board pay raises to City employees. One of my proposals calls for a sliding scale approach. City workers received a 3.5% pay raise last October, followed by another $750 raise in April. That alone exceeds what thousands of Austinites received during the same period. It does not seem hard-hearted to suggest that the lowest paid workers should receive higher raises, while the executives at the top should get very little, if any.

Council Members Ellen Troxclair and Don Zimmerman have revealed calculations showing that it would only cost $600,000 to raise the pay of Austin’s 350 full time workers earning less than $15 per hour up to that level. That sounds like a reasonable thing to do.

City officials have discussed trying to boost a large number of positions up to the level of some sort of market survey. Well, in a perfect world, every person in every job would be paid according to a study that shows how much they are really worth. The City needs to keep in mind that their jobs pay very well compared to an enormous number of other jobs in town, and the benefits are considerably better. If the Council Members are looking for a place to save measurable amounts of money in the budget, that would be a good place to start.

Pick the Right Set of One-Time Expenses For the $26.9 Million Transfer From the Reserves

It is out of my scope of knowledge to second-guess where the Staff and Council should look to find that list. But closing a fire station should not be on it. Perhaps they can defer some planned  purchases and spread them over a longer period. If they set a limit to the budget that does not go too far past the amount of the current budget plus the reserve transfer amount, then they will not need a large effective tax rate increase. My suggestion would be to ask the Staff for some alternate scenarios, with enough line item details to allow the Council to set priorities and make the best choice.

Get Rid of the Special Event Fee Waivers for For-Profit Companies (For Crying Out Loud)!

This is arguably one of the most unpopular policies in all of City government. I don’t need to repeat the specific details on that issue. But what seems in order is a compromise solution that funds City expenses for the events from a split formula. That would include the Hotel Occupancy Tax, a small surcharge on ticket sales, and, if anyone can handle this concept, requiring the event organizers to pay some portion of their own fees. This new funding formula needs to cover the entire cost of City services, keeping in mind that fees collected plus fees waived currently add up to less than the total cost of the services.

I hope the City Council has put in an information request to check on the intent and status of the November 2014 City Manager’s memo that appeared to shift the focus on special event funding over to setting up multi-year agreements with event organizers. That plan could lock the taxpayers in to continued fee waiver subsidies.

Is There Somebody Down In Houston Who Can Help Us?

I can remember a time when the last thing Austin wanted to be was anything like Houston. That town was considered just too big, just too disorganized without any zoning laws, and they had too darned many mosquitoes. Well, very recently I came across this little gem of a headline,  “Mayor Parker Holds Line On Spending With Final Budget Proposal.” Although this proclamation comes from the Houston Mayor’s web page, there are some interesting concepts and tidbits.

Similar to one option that Austin is considering, Houston’s Mayor proposes doubling the senior and disabled homestead exemption. And this statement sounds quite appealing, “Improved internal controls and more transparency for taxpayers and elected officials.” Their Budget Stabilization Fund would come in at $20.4 million, which compares to the estimate of $59.8 million for ours, after the transfers out. Of course, there may be very good reasons for the differences between Austin’s and Houston’s policies and strategies for their budgets. But I’m a big believer in looking at what other cities do and why they do it. Our new City Council members might gain some valuable insights by reviewing Houston’s proposed budget, which is available here.

With any luck, maybe we could ease our traffic woes by encouraging some of our visitors to head south to Houston and take a look around. To get them in the mood, how about these two songs – “Houston,” by Dean Martin from 1965 and “Houston (Means I’m One Day Closer to You)” by Larry Gatlin & the Gatlin Brothers from 1983.

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2 thoughts on “Austin Needs A Budget Affordability Strategy – Can Houston Help Us?

  1. Clint Smith

    Interesting avenues to pursue in search of urgently needed answers, Bill: and along with those is another possibility (aside from cutting services or raising taxes) long urged by Citizens’ groups; – an outside independent investigation of the City’s overall finances, incl retirement funds, etc,; i.e, incl’ in 152 p. petition by Citizens for Shared Governance several mos ago to the United States Attorney http://www.change.org/petitions/honorable-robert-l-pitman-inquiry-of-unresolved-issues-on-misuse-of-federal-funds – into opportunities for savings by attacking fraud, waste and abuse! North Austin Neighborhoods’ Newsletter also urged – as a #1 New Year Suggestion to the 10-1 Mayor and Council – not only a similar outside review, but specifics for improved internal audits {which could also produce savings by ID’g fragmentation, overlap, duplication of functions}! Thanks for your ideas, & wanted to add that attacking corrupt practices reduces costs, too (as Gray Panthers urged in a 28 Mar ’15 presentation to Mayor/Council on health/human services)! !

    Reply
    1. Grady Bennett

      Good, Bill, it helps average civilians to have some honest ideas from your past work for the City, because mayor and most of council members want to do right but still have steep learning curve. The time is shorter for right decisions on budget now and not much more time of learning on the job but to be asking after last half year on who is to be trusted with giving the right information. When will sombody, as a council member and more than one ought to be able to do by now ask the questions like those you do about these fees, and other waivers – is it spending or stealing ? What about weak audits, dishonest reports, bribery, crime costs taxpayers. Council swore to obey, apply laws. Its time for honesty with the public. Where money can be saved, do whatever whenever its is necessary.

      Reply

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