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.
Let me offer an example of runaway spending. The council just voted for a $720 million ‘transportation’ bond. It will cost taxpayers much more than that. Let’s skip the interest and 25 new staff members that will be needed to administer the program. The ballot language also calls for creation of Tax Increment Financing districts for each of the ‘Smart’ corridors. (Adler wants 10k new subsidized housing units.) That will permanently divert future property taxes into subsidized housing. This has 2 effects: Future councils will have to cut services or continue raising the property tax rate, and; continually raising taxes will decrease affordabilty thereby forcing ever more people into needing subsidized housing. What it amounts to is subsizing the development, real estate and banking sectors at the expense of the general public and general business.
Compiling a list of all planned new spending projects is a great idea. It will blow some people’s minds.