By Bill Oakey

October 6, 2013

You have probably seen the news reports that AISD has lost student enrollment this year.  They lost around 1,200 students for a variety of reasons, most notably the lack of home affordability in Austin.  The median home price here is the highest of any major city in the state, at $227,600.  That figure is very misleading however, since so many central city neighborhoods haven’t seen home prices that low in about 20 years.

Where Have Urban Austin’s Children Gone?

District officials should have seen the enrollment drop coming, but instead their demographer predicted a 250 student enrollment increase.  Perhaps AISD bureaucrats should consider reading an Austin affordability blog.  The migration of families with children to the outskirts of Austin is nothing new.  We all witnessed the plans for closing Zilker Elementary and some other schools just two and a half years ago.  At that time, the Austin American-Statesman ran a captivating story entitled, “Where Have Urban Austin’s Children Gone?”

Neighborhood parents rose up to successfully protest the school closings, but the handwriting was on the wall.  Then there is the whole question of the reputation of Austin schools and where people choose to live in hopes of finding the highest quality schools.  Affordability plays a wicked role in that battle, since some of the most affordable homes are in sections of town with low student achievement. On top of that, there has been a growing trend of low-income families fleeing to the suburbs because of high inner-city housing costs and high property taxes. But increasingly, more and more middle class families are leaving for the same reasons. Austin is fast becoming a destination for luxury homeowners, with fancy condos and townhouses mixed in with oversized McMansions.

A Legacy of High Spending and Top-Heavy Administration

In my taxpayer advocacy days of the 1980’s, I ofter referred to AISD as the Austin Inefficient School District.  I clearly remember that they typically maintained the highest per student costs in 8 out of 11 categories among the largest districts in the state.  Just four years ago in 2009, I met with then superintendent Pat Forgione and a couple of the board members to discuss AISD’s property tax rates.  That year they called for a “tax ratification election,” which is a State sanctioned local option for school districts to ask voters for a supplemental property tax increase.  This brings the total annual increase above the normally allowed cap.

In my meeting with the superintendent, I was told that the tax increase was necessary to keep teacher salaries competitive.  And that if those salaries ever fell too far behind,  it would be nearly impossible to catch up, given that the State Legislature does not fund schools adequately.  The local tax increase option passed with no organized opposition.

Fast forward to 2013.  We are clearly not living in the same Austin anymore.  The voters’ surprising defeat of two out of four school bond propositions in the spring was not the first cost related AISD issue to hit the newspapers this year.  Back in January, the American-Statesman reported that the number of administrators with six-figure incomes has increased 63% in the last five years.  A large chunk of that occurred in a single year, when the number of six-figure bureaucrats jumped 25% between 2012 and 2013.  It’s as if AISD feels compelled to join the private sector in extending the ever widening gap between rank and file workers and the privileged executives at the top.

The Winds Gather for the Perfect Storm

AISD teachers and staff did receive a pay raise for the new 2014 fiscal year that began this month.  However, the raises are not permanent since the funds were drawn from reserves.  So, how can the district restore funds for teacher pay raises next year?  The answer is another tax increase election on top of whatever regular tax increase would come in the 2015 budget. Nothing much will be happening to spook taxpayers next fall, other than three overlapping bond proposals totaling at or above a billion dollars.

AISD faces a daunting financial quagmire in the coming years.  If student enrollment continues to decline, the revenue loss of $7,400 per student would trigger a confounding question.  What could they do abut it?  This year alone, the district stands to lose $8.6 million.  If high living costs and high taxes are driving families away, raising taxes even higher to cover their losses would only make the problem worse.

District Judge John Dietz, who presides over the highly complex Texas school finance lawsuit will resume the trial in January, based on new evidence.  The Legislature restored much of the school funding that had been cut in the 2011 legislative session.  The State has vowed to appeal any court decision that awards more money to the schools.  In fact, the school funding bill that passed in this year’s session was crafted precisely in a manner that would help win the appeal.

If AISD finds itself back to square one, with declining student enrollment and no local appetite for increasing property taxes, they could be headed for financial trouble.  This is not a good time for that to happen, especially since the recently elected school board ran in opposition to the management decisions and personality of Superintendent Maria Carstarphen.

We can only hope that the new board can muster the gumption to steer the district in a direction of leaner spending.  At the same time, they need to restore the confidence of parents that their children will receive a quality education, while fostering an administrative attitude that welcomes citizen input instead of arrogantly rejecting it.

By Bill Oakey

September 19, 2013

Amid the tumultuous debate this week over whether and how to fund road expansions in Southeast Travis County, a big question has been largely overlooked.  Will new roads address the broader concerns of the underserved, mostly Hispanic residents in Precinct 4?

Most of the discussion has centered around the hot button issue of whether the expansion of Kellam Road and Elroy Road stands as just another subsidy for the Circuit of the Americas racetrack.  This week, the Austin-American Statesman published two opinions suggesting exactly that.  Vance Facundo, an F1 fan whose social media forums draw 6,000 followers, raised several interesting questions.  He doubts whether the massive growth projections for the area will pan out, and even cited reasons why the crowds for upcoming F1 races may not be sufficient to warrant the large scale road expansions.

Then on Wednesday evening, the American-Statesman editorial board weighed in.  They declared that all other claims aside, rushing the roadwork though with an unorthodox approach that bypasses voters serves only the interests of the racetrack owners.

That brings us back to Tuesday’s Travis County Commissioners Court meeting and the emotional comments by numerous speakers.  One that stands out in my mind came from Brigid Shea, who is running for a seat on the Court next year.  She spoke directly to the needs of the residents of Precinct 4, many of whom live below the poverty line.  Using an earlier cost estimate for the roads of $25 million, she listed several social service program items and numbers of potential affordable housing units that could be obtained for that sum of money.

This afternoon, seeking to put all of the issues into perspective, I sent the following message to the Travis County Commissioners:

Dear County Commissioners:

I fully understand the difficult challenges you are facing with the Southeast roadway expansion issue.  My sense from watching Tuesday’s discussion is that most of you prefer a shared approach with other funding partners.  At the same time, Commissioners Gomez and Davis are justifiably concerned about the divide that has kept the underserved population in Precinct 4 waiting too long for services that are overdue.

Let me suggest that the shared funding approach for the roads will help make more money available to serve those needs.  It will also reduce or eliminate the public perception that the roads are just a subsidy for COTA. Like it or not, public perception carries over into election campaigns.  On that battlefront, reason and sound policy give way to negative energy.

The Court would do well to tap into the community voices across boundary lines who know and care about best practices for underserved populations.  We need to address job training, affordable housing, and post high school opportunities for the folks who need them.  No one understands that better than the many businesses, large and small, who need a well-trained and educated workforce.

So, please take this opportunity, while the subject of needs in Precinct 4 is in the air, to address the broader issues as well as the roads.  The more productive and successful we can be across the divide, the better chance we will have to eliminate it someday.

By Bill Oakey

September 17, 2013

My second beer tonight came from one of those sampler packs, and unfortunately, it wasn’t very good.  But at least I got a chance to wind down from one of the wildest and wooliest public meetings I’ve experienced in quite some time!

The topic at hand was the F1 road expansion project for Southeast Travis County.  There were only a handful of citizens on hand to speak.  But it was quite lively.  If politics were defined as a spectator sport, today’s showdown at the races would certainly qualify as an event for the record books.

Let’s get one thing straight before going any further.  How did the vote turn out?  Did they vote to approve the roads using certificates of obligation, and to do so without voter approval? Not exactly.  Did they vote to approve Commissioner Bruce Todd’s alternate proposal to create a stakeholders committee to review the road needs and funding options and report back in six weeks?  Not exactly.

Well then, you might ask, what did they vote on?  All I can tell you is, I would sure like to know the answer to that myself.  I sat through the entire thing, and actually came away more confused than enlightened.  One thing is clear.  There won’t be another attempt at a decision until next Tuesday.

So, let’s start with the beginning of the meeting. Commissioner Margaret Gomez made an impassioned appeal for better road repairs and maintenance in Precinct 4, which includes the town of Elroy where the COTA racetrack is located.  She spoke eloquently of years of neglect for her underserved constituents there.  Even without the racetrack, she insisted, some of the roads are not safe for families and their schoolchildren.  After she spoke, a few of the family members, with toddlers on their laps, approached the table in front and addressed the commissioners with their concerns.

There was also a very lengthy staff discussion of the roads, which eventually included the total estimated price tag of $33 million.  Note that the price has gone up considerably since just last year, when most estimates never reached $20 million.  Expansions of Elroy and Kellam Road were the ones up for a vote.

All but one of the citizen speakers questioned the rush to approve the roads without first determining what other funding partners could be brought to the table.  Former Commissioner Sarah Eckhardt spoke intelligently and articulately as always about economic development and the need for “getting it right” on road projects as opposed to just getting it done.

One highlight of the afternoon was a near-meltdown of a personality clash between Gerald Daugherty and Cathy Olive, president of the Elroy Neighborhood Association.  She insisted that the section of Kellam Road up for discussion is actually part of Circuit of the Americas Boulevard.  After pausing to catch his breath, Daugherty backed away from a full scale fight with Olive, but it was obvious that a history of bad blood exists between the two.  Cathy Olive’s closing comment was that road crews were out there today “spreading black goo” to try to cover up cracks in the brand new pavement that was just put down before last year’s race.  She questioned the quality of the work done then, and wondered whether taxpayers can expect anything better the next time around.

My suggestion was that whatever health and safety issues involved in any of the roads in Precinct 4 should be dealt with on their own merits, and the necessary repairs and maintenance should be brought up to date as soon as possible.  As for the larger scale road expansions to benefit the racetrack, I recommended that the commissioners reach out to COTA for funding support.  I mentioned their repeated offers to share the costs during the period of January through April of last year.  To top it off, I asked them to approach COTA “at the highest levels” and ask them to become a major partner in other areas as well, such as sponsoring job fairs and a job training center.  I don’t think it would hurt to ask them to rebrand themselves as a high profile “good neighbor” corporate citizen.  Who knows, they might just go for it.  No one will ever know if they don’t ask.

Brigid Shea, who is the frontrunner for next year’s vacant seat on the Court, spoke up for the taxpayers and the need to keep the public’s ability to pay in mind when jumping into large scale expensive projects.  Both she and Susan Moffat recommended Bruce Todd’s proposal for a six week committee review.

Each commissioner weighed in with their thoughts.  It became clear right away that Commissioner Gerald Daugherty would vote with Gomez on her plan to approve a fast track approach to building the roads, through the Central Texas Mobility Authority.  Judge Sam Biscoe and Commissioner Bruce Todd stood in favor of a slower, more methodical approach with the stakeholders committee.  That left Commissioner Ron Davis as the swing vote.

Davis laid out his feelings about the longstanding community divide, which he stated was very much alive and well.  Like Ms. Gomez, he spoke of the need to equalize the treatment of an underserved population in Precinct 4.  He wanted to vote yes on the Gomez motion, but only if a shared funding plan would be included.

From that point forward, everything became about as clear as mud.  Commissioner Gomez made several attempts at a motion, each time followed with several attempts at friendly amendments.  And there was at least one substitute motion.  In the end they finally voted to come back and try again next week.

It’s what they actually intend to accomplish between now and next week that is not clear, at least not to me.  Bruce Todd spoke of merging his plan with Margaret Gomez’s and possibly getting a unanimous vote.  Hopefully, that means a cost sharing plan with several other partners besides Travis County.   When I was speaking, I asked one critical question.  Is it possible to use the fast-tracking approach offered by the Central Texas Mobility Authority with voter-approved bond financing?  The answer I was given was yes.  We can only hope that no one forgets that option when the horse trading resumes again next week.

By Bill Oakey

September 16, 2013

A recent article in the Austin American-Statesman grabbed my attention and made me ponder that question.  I thought we were long past the notion that cutting governmental budgets and making life more affordable for taxpayers was somehow restricted to Republicans.

Here’s how the conversation got started.  Travis County Commissioner, Gerald Daugherty, happens to be a Republican.  In the ongoing budget discussions at the Commissioners Court, Mr. Daugherty took the time to prepare an alternative budget.  His plan would only spend $5.6 million more than last year, and all of that money would come from increases in construction revenue.  The staff’s proposed budget would spend $40 million more.

Some of Commissioner Daugherty’s cuts may be considered controversial, such as eliminating an across the board pay raise for County employees.  But he also questioned the need to hire more middle managers in one department, and he listed quite a few items that he would either cut entirely or reduce in funding.  He made another list of items he would support if comparable cuts could be found in other places.  It’s a worthwhile gesture, even if not everyone would agree with some of the specifics.

The community-wide focus on affordability has elevated the need for politicians of both parties to work aggressively to hold down tax increases and look for innovative ways to find efficiencies.  A recent American-Statesman article about Commissioner Daugherty’s alternative budget raised the specter of old ghosts that apparently still haunt the Commissioners Court.  Some commissioners commented that Democrats could not be expected to match Daugherty’s enthusiasm for voting no on so many budget items, or campaigning to reduce taxes.

Well, here’s my response to that.  Halloween is coming.  It’s time to cast out the old ghosts from the past and think in terms of modern times.  Democrats are capable not only of practicing fiscal responsibility, but even doing it better than Republicans.  How about the fact that the United States was well on its way to eliminating the budget deficit under Bill Clinton? We had a robust economy.

Some final thoughts about Gerald Daugherty.  I am sure that I would not agree with all of his votes.  But then I would probably say that about most anybody else in office.  Commissioner Daugherty supports funding for social service programs to help the less fortunate in the community, although often at a lower level than the proposed budget.  But consider this.  He made personal site visits to every non-profit that requested funding under this year’s budget.  That’s something that even Democrats in his precinct position have not done.

So, when it comes to fiscal responsibility, as well as compassion, there are lessons that can be learned from both parties.  The most important one is that Austin and Travis County need more cooperation and focus on affordability.  And that means tossing out old fashioned notions about either party being able to lay claim to any strategy that will get us there.

By Bill Oakey

September 11, 2013

As a battle-scarred veteran of City Hall skirmishes dating back to the 1980’s, I jumped into the fray with the County Commissioners Court, not knowing what to expect.  It all started a few months ago when I started questioning the $300+ million cost of the proposed new Civil and Family Courthouse.

Not having access to high paid consultants, I sat down at my computer and tried a Google search for “new County Courthouse.”  After browsing through several small town projects, I hit the jackpot with Broward County, Florida.  They have a new courthouse under construction that is half the cost per square foot than the one being proposed here.

Armed with pages of detail, I drafted a summary and emailed it to all five members of the Travis County Commissioners Court.  Within just a few minutes, I received a polite and friendly response from Commissioner Margaret Gomez.  From that day forward, the entire Court has been very helpful and supportive of ideas for saving taxpayer money.

In the case of County Judge Sam Biscoe, I was particularly impressed with his patience and fair minded approach to dealing with citizens.   This even includes the flying-saucer-conspiracy-nut-cases that show up for Citizens Communications.  I met with Judge Biscoe for a full hour.  His response to my courthouse research was to place an item on the agenda to seek a formal staff review of cost saving options derived from other courthouse projects.

The meetings I had with other Commissioners were positive as well, regardless of political party affiliation.  We discussed holding the line on the overall budget.  Commissioners Todd, Daugherty, and Gomez all told me about their steps in that direction.  I even received emails with some details of their cost saving efforts.

On Tuesday, Sept. 10th, the Commissioners Court took up Judge Biscoe’s agenda item for a staff review of comparative costs for new courthouses.  I walked up to the front table and took a seat between two staff members.  I’m sure they were wondering “Who in the heck is that guy?  (I ask myself that same question all the time).

An idea had come to me earlier that morning, as I sat in the Court and waited.  When it was my turn to speak, I sprang it on the Commissioners.  “Please direct the staff to make this courthouse a national model of cost-effectiveness and efficiency,” I asked.  Judge Biscoe obliged and inserted those words into his memo.

Here’s a little secret about how I got that idea.  I found a passage in one of the thick consultant reports on the new courthouse.  They were promising to deliver a “World Class Facility / A Grand Public Building.”  That got me to thinking about the Sorcerer’s Apprentice.  I could see a consultant carrying two buckets full of reports.  Each report proposes a taller and even more expensive building.  Then, like the brooms in the original story, the single consultant morphs into two, carrying four buckets.  Then there are eight, sixteen, thirty-two and so on.

I decided to speak up before the chickens (Sorcerer) came home to roost!

By Bill Oakey

September 10, 2013

You have probably heard the news by now.  The Austin City Council “held the line” and did not raise the property tax rate for the new City Budget.  Unfortunately, this is one of the worst examples of public deception and lack of transparency that we have in our city.  The entire process needs to be reformed from top to bottom.  But for now, let’s keep it simple and focus on the tax rate issue.

On Tuesday, Sept. 10th the City Council gave each other high fives and whooped up a storm because they “did not raise the tax rate this year.”  Mayor Lee Leffingwell deserves some credit for insisting that they not increase the rate and make things even worse.  But what they gave us is a 3.8% tax increase.

Now let me explain how that happened.

Each year the City publishes a number called the “effective tax rate.”  That is the rate that would generate the same amount of revenue as last year.  This year, because overall property values increased, the effective tax rate went down.  That figure for this year’s budget cycle is 48.43 cents.  The City would have to adopt that rate in order to balance the budget with a zero tax increase.  The 50.27 cent rate that they did adopt equates to a 3.8% tax increase for the average appraised homeowner.

In some neighborhoods, the tax appraisals went up so much that homes are subject to the annual 10% cap on tax increases. So, people in that situation will see their City taxes go way up. City officials have no way of announcing what the tax impact will be on everybody.  But they could certainly be a lot more transparent and a lot less deceptive. Because of fluctuations in property values from one year to the next, it is silly to even think about comparing last year’s adopted tax rate to this year’s.  The effective rate is the one that matters.

Regardless of whether overall property values have gone up, gone down, or stayed the same, the effective tax rate will result in a zero tax increase for the average value home.  That’s the whole reason such a rate was created in the first place.  Cities use it as the starting number to make sure they do not exceed the maximum tax rate allowed by State law.

So, we need to reform the City of Austin’s budget process.  We should require them to publicize any increase above the effective tax rate that they are considering for the new budget.  That approach is sometimes called zero-based budgeting.  It’s a method that would tell us what any increase in spending would actually do to our taxes.   If the City had based all of their negotiations around the effective rate of 48.43 cents, we would have had a fair and honest budget debate.

But here’s what really happened.  City budget staff recently announced that they had $13 million more than anticipated because of increases in construction fees and sales tax collections. So, the City Council applied $7 million of that surplus towards reducing the tax rate down to 50.27 cents, 2/100 of a cent below last year’s rate of 50.29.  Then, voila! They suddenly had $6 million in happy-go-lucky “leftover” money that they could spend! Which of course, they did.  Then came the high fives, the whooping and all the rest.  All because last year’s totally meaningless tax rate was touted, instead of the fair and honest effective tax rate.

So, grab your partner, hold hands and get ready for a new kind of dance.  Next year we are going to reform the City Budget process!  And if we’re really lucky, we might be able to slip in one other reform.  How about requiring them to hold the public hearings that are published and advertised as “starting at 4:00 PM” to actually start somewhere near that time?  I stayed at home on the couch for the last one, because it started 6 hours and 39 minutes late.  Like they always do.

Note 1: For a City chart that shows the increase in property values and the effective tax rate, see Page 17 of the Proposed Budget: www.austintexas.gov/edims/document.cfm?id=193732

Note 2: In 1987 I presented a proposal to the Texas Legislature, which resulted in the revised truth-in-taxation law that local governments use to publicize notices of proposed tax increases.