Monthly Archives: August 2016

Ellen Troxclair Is First To Stand Up For Affordability

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By Bill Oakey – August 21, 2016

With Austinites reeling from another year of double-digit tax appraisal increases and neighborhoods across the city losing longterm residents because of high taxes, this blog has called for City Council action on affordability. In Saturday’s Austin American-Statesman, Council Member Ellen Troxclair became the first to speak up, with an op-ed calling for an official “Year of Affordability.” (This recommendation is Item # 8 on the Affordability Petition to the City Council, posted here on August 11th).

Council Member Troxclair’s willingness to stand up for the taxpayers should be embraced immediately by the rest of the City Council. Although the technically non-partisan Council often splits along obvious party lines, affordability is such a critical issue that it demands attention from all quarters. Kudos to Troxclair for pointing out that the City Budget is growing much faster than our population, and that they have $40 million in new revenue to spend without any tax increase at all. And yet the proposed budget raises them to the legal maximum of 8%.

Remember This – If The City Keeps Raising Taxes 8% Every Year, Your Taxes Will Double In 9 Years!

One of the reasons that the budget is so high is that it includes funding for a wide variety of City plans. As this blog has pointed out several times, there is no coordination or systematic approach to the City’s overall planning process. There are so many plans on the books that no one on the City Staff or the Council would even know where to begin if they were asked to list them all or determine what their total cost might be. And yet, more and more new plans pop up every year, costing millions of dollars to develop and publish. Just close your eyes and try to imagine any private company stumbling blindly into the future without any earthy idea how many plans they have or how much they might cost. The City just plugs the numbers into the budget each year, and crosses their fingers that the taxpayers won’t mind. (See Item # 7 on the Affordability Petition).

Let’s Ask the Entire City Council to Reduce the Budget, Lower the Utility Fees and Live Within Their Means – Just Like You and Your Families Have to Do!

Here is the single-click link to email the entire City Council. Feel free to submit the link to the Affordability Petition from this blog.

Here is Council Member Ellen Troxclair’s Editorial. Let’s hope she can find co-sponsors to make the budget more affordable.

Troxclair: Make this the year of affordability

By Ellen Troxclair – Special to the American-Statesman, August 20, 2016

When voters sent the new 10-1 council to City Hall, they did so with a clear mandate to address the rapidly rising cost of living in Austin in order to slow gentrification, address economic segregation, keep long time Austinites in their homes, and protect seniors — and the rest of us, too — from losing their quality of life. Yet, as we enter our second budget cycle, “affordability” seems to be slipping further and further away.

In these next few weeks leading up to budget adoption, critical decisions about property taxes, utility bills and city programs will be made. This is when the difficult choices are supposed to happen. But the proposed budget takes the easy road at every turn.

It includes an increase to all utility bills and every major fee in the city, and it proposes adopting the maximum tax rate allowable under state law. General Fund spending is increasing a whopping $58 million, and an additional 437 new city employees are being added to the payroll.

To put this in perspective, since 2010, the increase in the adopted tax rate, when compared to the effective tax rate, never rose above 4.4 percent. Last year, that increase was 6.85 percent. This year, we are faced with an 8 percent increase. This occurs despite the fact that Austin already has a higher cumulative property tax bill than all the major cities in Texas when calculated as a percentage of income.

While the individual financial impact will vary, if you live in the median-valued home — which is $278,741 — with the 8 percent homestead exemption, your property taxes, utility bills, and fees will increase an estimated $150 a year. This, of course, does not include the impact from the other taxing entities like Travis County, Austin ISD, Central Health or Austin Community College. If you own a business, or have an older home that is not considered energy efficient, you will likely be faced with an even greater increase.

Some argue that we’re a growing city and we have to keep up. While this may be true, our spending is greatly outpacing our increase in population. The city’s population grew 2.5 percent in 2015, but our spending is increasing a massive 6.7 percent.

The growth is certainly already contributing the city’s coffers. Property tax revenue from new construction is expected to increase by $10.2 million. Sales tax for the city is expected to increase by $8.5 million. Hotel occupancy taxes could rise by $11.2 million. Licensing, permitting, and inspection revenues could increase by $9.1 million. Charges for services other than utilities could increase by $2.4 million. Parking revenue could go up by $900,000. Other taxes, which includes alcohol tax is expected at $1.7 million.

This means that the city is already bringing in well over $40 million in additional revenue this year, and is still going to turn to you for more money.

The city must learn to live within reasonable means, set goals that have measurable outcomes, and scrutinize every program in order to become relentlessly efficient with taxpayer dollars.

In this year alone, I have voted against hundreds of millions in spending, from high priced consultants to vehicle purchases to cost overruns. I did not vote this way because replacing vehicles every three years or hiring consultants aren’t nice things to do. It is because each vote and each purchase ultimately impacts affordability. We must ask ourselves: Is this item a higher priority than financial relief for Austinites?

Beyond that, the city could choose not to add any new positions until the over 1,000 existing vacant — but fully funded — positions are filled. Save the money allocated to these vacant positions as a credit to the next year’s budget. The city could limit the surprisingly large marketing budgets and significant transfers to other departments from Austin Energy, Austin Water, and Austin Resource Recovery.

None of these choices would result in laying off employees or cutting critical services, which is so often the false narrative when confronted with the idea of slowing spending.

Austin residents need a break — and this is the time to take their pleas to heart. We have to end the pattern of consistently increasing spending that has become a crisis for our city. It’s time for action, and it’s time for this budget year to be the Year of Affordability.

Troxclair is a member of the Austin City Council, representing District 8.

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Affordability Petition To The City Council – Let’s All Join In!

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By Bill Oakey – August 11, 2016

Unless Austinites come together quickly and petition the City Council, the new budget will hit us with the biggest round of property tax, utility and monthly fee increases in several years. The entire concept of affordability has been tossed to the wind by a City Manager and staff that appear to be isolated from the realities facing us. The lofty language in the budget crows about a booming local economy. But it doesn’t mention what’s happening to you and your neighbors – being taxed out of your homes, runaway rent increases, and stagnant wages.

This Petition Needs To Move Quickly. You Can Print It and Distribute It To Your Friends. Or Just Share This Blog Link By Email And Social Media

Affordability Petition to the Austin City Council – August 2016

We call upon the Austin City Council to reject the City Manager’s FIscal Year 2017 Budget recommendation. We respectfully ask you to recognize that affordability is the number one civic issue, and to protect the interests of taxpayers by taking the following actions:

1. Make responsible adjustments to the Budget to reduce the effective tax rate increase from 8% to 4% or less, in line with most City Budgets adopted since 2011. Delay or phase in new programs. purchases and staff positions, rather than sacrificing critical community needs. (Annual increases of 8% would cause property taxes to double in 9 years – even sooner if tax appraisals go up).

2. Place all utility charge and utility bill add-on fee increases on hold. Ask the City Manager to report back to the City Council with a much more affordable fee schedule. (The dollar impact of the utility and fee increases is 2.4 times higher than the property tax increase for a typical resident).

3. Provide senior citizen discounts for all utility bill add-on fees. This is necessary since these fees are growing faster than property taxes.

4. Establish a sliding scale for City employee pay raises. Consider a flat dollar amount or a percentage with a dollar cap. Provide living wages for low-income workers. (2.5% raises over 10 years would increase a $150,000 salary by $37,329. But a $30,000 salary would only increase by $7,466. This would promote economic segregation).

5. Allocate equal City resources to retaining existing Austin residents as for recruiting new businesses. Please consider the AustinAffordability.com ”Homeowner Retention Initiative” as a starting point, along with policies and practices to help renters.

6. Establish a formal timeline to rapidly implement the Mayor’s “Music & Creative Ecosystem Stabilization Recommendations.” We need to protect Austin’s creative Industries and our quality of life.

7. Compile a comprehensive list of all City plans, determine estimated costs for each plan, along with a grand total cost for all of the plans. Publish the list on the City’s website. Seek public input to prioritize the plans and develop an affordable timeline for implementing them.

8. Make an official declaration of 2017 as “The Year of Affordability,” and pursue it as vigorously as you did the 2016 declaration for “The Year of Mobility.”

For more details on how the FY 2017 Budget shuns affordability, read this posting.

How to Get the Petition to the City Council

The fastest way is to use this single-click link to email all of them at once. Just tell them you support the AustinAffordability.com Affordability Petition. Or copy and paste it into your email. If you want to distribute printed copies, those can be mailed to: Austin City Council, P.O Box 1088, Austin, Texas 78767.

Come to the Public Hearings Next Thursday, the 18th

Please invite your friends and come to speak at the City Budget and Tax Rate public hearings. These will be held at 4:00 on Thursday August 18 at City Hall, 301 W. 2nd Street. You can sign up to speak on Item # 82 and Item # 84 at the kiosks in the City Hall lobby beginning next Monday, August 15th.

ALERT – City Budget Shuns Affordability With Record Tax, Utility And Fee Increases

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By Bill Oakey – August 4, 2016

Before you even start reading this, get ready to think about what you can do to help. The proposed City Budget is moving like a freight train through City Hall. We don’t have much time to slow it down. What we face is a taxpayer, utility ratepayer and fee payer disaster on two major levels:

1. The budget raises property taxes by 8% above the effective rate, which is the highest allowed under Texas law, without triggering a rollback election.

2. Every utility charge and utility add-on fee is slated for increases – so high that the total dollar impact on the “typical” resident is 2.4 times higher than the record tax increase!

Hang Onto Your Hats for This One Folks – If They Raise Property Taxes 8% Every Year Going Forward, Your Taxes Will Double In 9 Years!

And if your tax appraisals keep going up, they will double a lot sooner. Now let’s take a look at what I found after reviewing the City Budgets adopted since Fiscal Year 2011. In most of those years, the effective property tax rate only increased by about half of the legal maximum of 8%:

Fiscal Year Effective Tax Rate Increase
2011 2.9%
2012 4.2%
2013 4.1%
2014 3.9%
2015 4.4%
2016 6.8%
2017 8.0% (Proposed)

You can review several years of the Austin City Budget here.

How Does the City Staff Rationalize These High Proposed Increases?

In Volume 1, Page 29 of the budget, you will find a cheerful note declaring that a “typical family” would only pay $324 per month for City taxes and fees. They state that this is only 4.8% of the median family income for our region. Well, just look at your utility bills and your property tax bills. Then, sit down with your neighbors and take a look at theirs. Ask each other how many of you would consider yourself “typical,” based on this chart in the Budget. If you live in anything larger than a small condo, your utility bills, fees and taxes are probably much higher.

But here’s the biggest flaw in the argument about City taxes and fees being “only a tiny portion” of your annual income. That doesn’t account for the long parade of other taxes from AISD, Travis County, Central Health and ACC. Of course you could isolate just one taxing entity on your total bill and claim that it isn’t really all that bad. But hey, we have to pay the entire bill! And it’s absurd to suggest that a “typical” family currently pays only $221 per month on their utility bills. The mere suggestion put forth in the City Manager’s proposed Budget that we the citizens don’t have a problem with these costs is outrageous, preposterous and insulting to our collective intelligence!

Please Share This Blog Piece With Your Neighbors, Friends and Co-Workers

Ask them to use this single-click link to email the Mayor and every City Council member. If the City Manager and his staff can’t find a way to make the City departments run more efficiently and more affordably, then it is simply time for them to hit the road!

How Could the City Council Easily Trim the Budget?

Last year I fought hard to convince them to apply cost of living pay increases on a sliding scale. The wealthy managers and executives at the top do not need the same percentage increase as the lowest paid grunt workers. Several City Council members spoke favorably of the idea and even floated various scenarios to make it happen. I pointed out that many times during my 35 year career as a State employee, the Legislature gave us flat dollar amounts as pay raises. This helped the lowest paid workers and held down the skewed impact of percentage increases.  But last year, the City Manager sent a screaming and crying letter to the City Council, complaining that the entire staff had been humiliated by the suggestion of more equitable pay increases. This caused the City Council to fold their tents and abandon the idea immediately.

But Here’s the Crazy Irony In the Situation

Year after year, City officials complain that the State will not allow a flat dollar amount to be used for the City homestead exemption on our property taxes. Every City Council for as long as I can remember has wanted the Legislature to change the law. They have argued correctly that a percentage increase in the homestead exemption favors wealthy homeowners. A 20% exemption on a $1 million home is $200,000. But for a $150,000 home, it is only $30,000.

Well, here’s my question. Why not apply that same logic to across the board pay raises for City Employees? The chart below shows what happens to lower end and higher end employees if they all get a 2.5% pay increase every year for 10 years. Ask yourself if a flat dollar amount would be more equitable. Or at least a sliding scale of some sort on the percentage amount.

City Employee Pay Raises at 2.5% Per Year
Year Low End Salary High End Salary
1 $30,000 $150,000
2 $30,750 $153,750
3 $31,519 $157,594
4 $32,307 $161,534
5 $33,114 $165,572
6 $33,942 $169,711
7 $34,791 $173,954
8 $35,661 $178,303
9 $36,552 $182,760
10 $37,466 $187,329
     
Total Increase $7,466 $37,329

You can see how the rich get richer. For the record, Politifact Texas reported that as of Sept. 1, 2014, 879 City workers earned between $100,089 and $304,657.

Let’s Put a Human Face On Austin Affordability

My friend, Todd Jones, sent me the following email and granted permission for it to be published. I can’t think of anything to add to his comments. Except that I would like for each City Council member to print it and leave it by their bedside between now and the end of the budget cycle.

Bill,

I am over 65 and my property taxes are still around $10k this year even though my AISD portion was frozen when I came ‘of age.’
My home is paid for but my taxes are far more than what I paid each year when I had a mortgage.  I am retired and my pension and social security check did not go up this year.
I just received a utility bill for over $500. for July.  This is the highest bill I have ever received during any summer month since I moved back to Austin from San Antonio in 1983.  We are not lavish when it comes to running our air conditioning.  In fact, we recently bought an expensive high SEER central air conditioner in effort to save money on our electric bill.  Apparently that was for naught given the city’s ridiculous tier system for measuring water and electricity.  We water twice a week to keep our yard from becoming a desert.

We are a man and a wife, both retired finding living in Austin un-affordable.  I suppose we receive some benefit from our taxes we pay but it’s hard to rationalize the amount we pay -vs- the benefits received.  We hope to continue living in Austin because we have a son and a grandson who live here.  However we feel like we have no representation when it comes to affordability.

While we could make a lot of money by selling our home and moving to almost anywhere else…we really would hate to pack up and leave in disgust.

(Feel free to use this letter or a portion as one example of disillusionment with living in a city and county on spending sprees that do not take in to account individuals on a fixed income or people who do not make a lot of money).

Todd

Musical dedication to the City Manager and any other staff members who do not understand affordability and who refuse to accept the notion of pay equity for City employees:

“Hit the Road Jack” – Ray Charles, 1961