By Bill Oakey – April 26, 2021
Before the ink was barely dry on tens of thousands of shockingly high Austin property tax appraisals, City budget officials crafted a startling and alarming memo to the City Council. First reported by KXAN News last Thursday, the memo describes a purported $23 million shortfall in the upcoming City budget that will be hammered out this summer.
Despite Receiving $195.8 Million in American Rescue Plan Funds, Chief Financial Officer Suggests 8% Tax Increase!
The Texas Legislature has placed a 3.5% revenue cap on City and County tax increases. But, there is an exception to the tax law. I had to rub my eyes and blink twice to believe that I read his words correctly. But this is what Austin CFO, Ed Van Eenoo said to KXAN News:
“Essentially the language says that, you know, if there’s a disaster declaration, the year of that disaster declaration and the subsequent year, cities have the opportunity to go to the 8% increase,” Van Eenoo said. He estimates that change would result in about $15 to $20 million more in revenue for the city.
He Forgot to Mention That Austin Received $195.8 Million In COVID Rescue Plan Funds!
The City has a special webpage that celebrates the huge Federal windfall. But you won’t find a single word about using it to provide critical property tax relief for homeowners and small businesses. Are they completely out of their minds?! The spending plan includes these categories: Public Health, Economic Recovery Resources, Hotel Occupancy Tax-Funded Services and Contingency. The $39.2 million contingency is for “unanticipated events.”
Well, Guess What…The “Unanticipated Event” Contingency Would Wipe Out the City’s Budget Shortfall
Or, the City could easily adjust some of the other non-health categories. The disturbing memo that the Budget Office sent to the City Council on April 16 echoes the CFO’s bizarre obsession with raising taxes to the 8% legal maximum. Here is the very first “Action Item” in the memo:
“Council must take action to direct that the voter‐approval rate be calculated using the higher, 8% increase factor. This initial action does not require that Council ultimately adopt a property tax rate at this higher level, but this direction must be given in order for Council to retain the option to do so during its budget adoption proceedings in August.”
The memo also lays out a parade of fee increases, stretching over the next five years! And don’t forget this year’s 23% tax increase for the Project Connect boondoggle!
Please Join With Me. Let’s Unite Behind a Much Better Property Tax Increase Amount:
Use This Single-Click Link to Email the Mayor and All 10 City Council Members
Tell them you support a zero property tax increase and zero fee increases in the upcoming City Budget. Be sure to ask for a zero increase in the “effective tax rate.” That would actually lower the rate that goes on your tax bill, and help offset the huge tax appraisal increases. It’s a no-brainer to use a portion of the American Rescue Plan (ARP) funds to bring tax relief to struggling Austin homeowners and small businesses.
Keep in mind that 6 City Council seats are up for election next year! Share this blog link with all of your friends, and post it to social media.
The Brookings Institution Recommends That Cities Use ARP Funds to Cover Budget Shortfalls
You may hear excuses for why tax relief can’t be done, or why it isn’t a good idea. That is poppycock! Here is what the Brookings Institution says about it:
“Based on our on-the-ground work in Northeast Ohio and Birmingham, Ala., we believe that elected officials—and the networks of civic, business, philanthropic, and community stakeholders that surround them—should take a three-pronged approach to using their ARP funding: stabilize, strategize, and organize. Stabilize – ARP provides state and local governments with the resources to stabilize their operating budgets.”
Raising Taxes As High As Possible Is Embedded In the City’s Bureaucratic Culture
Starting the budget process with the highest possible tax increase is like giving a teenager a $100 bill to go to the movies, and hoping he will bring back $86. The City’s motto seems to be “Raise taxes first, and ask questions later.” It is time for every homeowner and small business owner to rise up and stop that nonsense dead in its tracks!