Tag Archives: Austin Property Taxes

Save Money Under The New Tax Bill – Pay Your 2017 Property Taxes By December 31st

By Bill Oakey – December 27, 2017, Updated December 28, 2017

Please note: Your 2017 property tax bill is not due until January 31, 2018. This blog piece offers a suggestion to pay it by December 31st, to take advantage of changes to itemized deductions in the new Federal income tax law. But, you cannot claim a 2017 Federal tax deduction by prepaying your 2018 property taxes. The 2018 property tax bills will not be generated until the fall of next year.

If you itemize your income tax deductions, you could save money by paying your 2017 property taxes by December 31st, this Sunday. The new Federal tax bill puts a $10,000 cap on state and local taxes that you can deduct. This change takes effect in 2018. So, if your property tax bill is higher than $10,000, paying it by December 31st could give you a one-time cost savings. You might want to consult with a tax accountant to evaluate your best option.

Your 2017 tax bill was mailed to you several weeks ago. You can also look it up on the Travis County Tax Office website. If you want to pay it by mail by December 31st, follow these guidelines from the Travis County Tax Office. Payments made with a U.S. Postal Service postmark on the due date are considered timely. Commercial postal meter imprints are not considered postmarks for the purpose of determining timely payments.

As to why those property taxes are so high, and what can be done about that, here’s a parting thought. Go ahead and enjoy the parties on New Year’s Eve. Then, check back with this blog in the New Year. There will be plenty of adventures ahead in the battle for affordability!

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City Council Rejects Police Contract – But Will They Trim The Cost?

By Bill Oakey – December 14, 2017

The late-night vote to send the contract back to negotiations was unanimous. And unprecedented. It came after seven hours of heated public testimony from both sides in the debate. This is the first time a City Council has ever rejected a police contract. Here’s the bottom line…

We Have Until March 22 to Implore the City Council Not to Let the New Contract Double Our Property Taxes Every 9 Years!

This issue is also about improved public oversight of the police. But for hundreds of thousands of taxpayers who are struggling with the taxes we already pay, we face a very real danger. The police negotiators will continue to demand higher pay in exchange for the reforms in citizen oversight.

What Is Wrong With This Picture?

I ask everyone reading this to please grab a pen and write down eight critical words – How do they do it in other cities? Put that scrap of paper in your wallet or purse. Then, every time you meet a City Council member, pull out that note and read the critical question out loud – How do they do it in other cities? What’s wrong with the picture in the police contract discussions is this:

1. Austin already has the highest police salaries in the State of Texas.

2. Our standards for public oversight of police are among the lowest in the country.

What Were the Scariest Moments in Last Night’s Meeting?

Over and over again, I kept hearing the same line of talk. Look at these variations on a single theme, straight from the Council dais and from the lips of the speakers:

1. “If we add X number of officers over the next five years, how much money will be left in the General fund for other programs?”

2. “If these new benefits are kept in the contract, will we end up with more or less money to spend in the General Fund than we were able to spend this year?”

Every time I heard a question like that, I knew something scary that is fundamental for every taxpayer to know…

City Officials Are Assuming That Raising Property Taxes to the 8% Legal Maximum Is the New Normal!

When Council members asked, “Can we afford this in the police contract, or can we afford that,” here’s what they meant by “afford.” They wanted to know if the “leftover money” after the contract was paid would be enough to cover the other services that the City normally provides. Plus all the new spending items from goals that the Council has set. All of this assumes the same chilling fact. The City expects to hit the maximum allowed 8% property tax rate every year going forward. And if that happens, your City taxes will double every 9 years.

How Can We As Taxpayers Stop This Cost Spiral?

1. Email and call City Council members. Ask them to reduce the unaffordable pay raises in the police contract.

2. Ask them to establish more reasonable boundaries for the pay raises.

3. Ask them to communicate those boundaries to the police and the City negotiating staff BEFORE the negotiations even begin.

4. Above all, ask the City Council to let the negotiators know that bringing our police accountability standards up to the nationally accepted level DOES NOT require granting unaffordable pay raises!

5. Don’t ask the City Counci…Tell them…That there is no such thing as “leftover money” in the City Budget. They need to overhaul their thinking and adopt a whole new set of goals. Doubling our property taxes every 9 years MUST NOT be an option. Would everyone please pause and take a look at the subtitle of my blog at the top of this page. It says this…

Let’s Put the Public’s Ability to Pay Into Austin’s Planning Process

Every City Council member should ask themselves one little question before they tuck themselves into bed tonight…When was the last time period that most of their constituents got annual pay raises, year after year, equal to what they as taxpayers are giving to City employees? Then, let them drift peacefully off to sleep and have pleasant dreams.

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

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.

Joint Ownership Options Could Help Keep Austinites In Their Homes

By Bill Oakey – February 24, 2016

One of the biggest problems facing longtime Austin residents is the high cost of property taxes. In recent years we have seen skyrocketing property appraisals that are literally pricing people out of their homes. Neighborhoods across that city that were once affordable are constantly seeing older homes bulldozed and replaced by very expensive luxury housing. This cycle of resident displacement and gentrification is difficult to overcome. Many of the affordable housing options being discussed by City officials consist of fee waivers to developers or geographic tax abatements that ultimately end up shifting the costs to other taxpayers. There are no easy solutions.

Joint Home Ownership Might Help Solve the Problem

Relatives and friends can legally enter into agreements that allow them to share ownership in a home. For example, you could ask a wealthy uncle to buy a 40% stake in your home. One simple way to do that would be for him to put up 40% of the equity that you have have in the home. Then from that point forward, you would pay 60% of the monthly mortgage bill and he would pay 40%. You would also share a 60/40 split on other expenses such as insurance and property taxes. And you would split the Federal income tax mortgage interest deduction. Neither one of you could sell the home without the other’s agreement, but you could sell your interest in the home. If the home is eventually sold, you and your uncle would do a 60/40 split on the proceeds.

Of course, not all of us has a relative or a trusted friend who would be interested in becoming a joint owner of our home. Perhaps the City of Austin should explore new and innovative ways to make joint ownership available for people who find themselves in danger of losing their homes. Right now, you as a homeowner cannot call up your mortgage lender and offer to sell an interest in your home to that lender. There is not a real estate office that you can call and ask to list a percentage of your home for sale on the open market. But if systems like that could be put in place, it might help a lot people be able to afford to stay in their homes.

High housing costs and property taxes also make it difficult for renters to be able to buy a home. Since the end of the recession, the rate of home ownership in the U.S. has declined. Tighter lending standards and student loan debt have made a harder for first-time buyers to get a home loan. CNBC recently published an article entitled, Is a Single-Family Home the New Luxury Item? The same could be asked about condos and townhouses, especially in Austin. A joint ownership option could help reduce the barriers to first-time homebuyers, including the down payment.

I would like for our City officials to consider this idea and discuss it with members of the real estate community. Joint home ownership is legal in Texas, but expanding it to real estate brokers and mortgage lenders could require changes to state or Federal laws. It seems like it would be a boost to the economy and quite helpful to many Austin residents. Many of us might be willing to give up a portion of the investment in their home for an opportunity to enjoy a lower burden of expenses.

Austin And Travis County Should Announce Joint Affordability Initiative

By Bill Oakey – July 15, 2015

In about 7 weeks the City of Austin and Travis County will each have to finalize their Fiscal Year 2016 budgets that will take effect on October 1st. For the past several years, citizens throughout the area have been clamoring for major steps toward affordability. Today I am calling upon City and County officials to make some decisions on what affordability measures and proposals they will include in their new budgets, and to make a public announcement telling the citizens what their affordability plans are. As I have said many times in public presentations – the time for talking about affordability is behind us. The time for action is now.

The Austin American-Statesman has repeatedly editorialized on the need to slow down the growth of the City Budget in particular. Austin’s downtown has added countless high rise buildings that should be adding to the tax base and making it easier to pay for expanding City Services. The same is true for neighborhoods all over town that have seen gigantic new resort-style apartment structures that take up a full block. Traditional neighborhoods in all parts of Austin have seen older homes scraped off and replaced with expensive luxury housing.

So that leaves us with a fundamental question. Where is all the increased tax revenue from all of those high-priced new buildings going? Why are our property taxes continuing to rise so rapidly that people are being priced out of their homes?

What Is the Bottom Line On the Growth of the City and County Budgets?

What you are about to see is not a pretty picture. Notice the rapid increases in the general fund in both of these budgets. That is the fund that is paid for with property taxes, sales taxes and some of the fees

City of Austin
  2010 2015 % Increase
General Fund $614,915,000 $854,040,000 38.9%
Total Budget $2,747,105,000 $3,493,973,000 27.2%

Travis County
  2010 2015 % Increase
General Fund $455,661,280 $650,897,476 42.8%
Total Budget $655,140,525 $910,988,941 39.1%

Has Affordability Been Addressed In These Past Budgets?

You will find that word sprinkled quite liberally throughout the current FY 2015 City Budget. In fact, in Volume 1, it graces the pages no less than 29 times. On Page A-8 within City Manager Marc Ott’s cover letter, he issues the following pronouncement with italics included:

“Carefully balances the service demands of a growing community with ongoing concerns over affordability by proposing a full penny decrease in the tax rate.”

That statement contrasts with the opening sentence on the very first page of the Budget:

“This budget will raise more revenue from property taxes than last year’s budget by an amount of $29,970,162, which is a 6.7 percent increase from last year’s budget. The property tax revenue to be raised from new property added to the tax roll this year is $8,375,296.”

What that means is that existing property owners paid the overwhelming bulk of the tax increase, to the tune of $21,594,866. The word “tax” appears 298 times in the first volume of the three-volume document. The word “fee” shows up 277 times. But, alas, on Page A-15 “affordability” gets its own section heading, with the title “Maintaining Affordability.” Most of the initiatives listed pertain to subsidies and assistance to low-income and senior residents. These are, of course, very worthy programs. But the bottom line for the average homeowner is that total property taxes for all of the taxing entities in Central Texas increased 6.1%, as shown on Page A-16. And that does not include the relentless forward march of the various “add-on fees” that appear on our utility bills.

What Can the Taxpayers Expect Over the Next Five Years?

You would probably be less frightened by spending a weekend alone in a haunted castle during a thunderstorm, while reading a Stephen King novel. But if you care to take a look, here is a glimpse of Page 60 in the City’s current Five Year Financial Forecast:

City of Austin Property Tax Assumptions

Fiscal Year Projected Assessed Valuation Growth Projected Total Tax Rate Projected Operations & Maintenance Revenue
FY 2016 9.0% (actual amount is 11%) 0.4782 $385,500,000
FY 2017 7.0% 0.4850 $420,900,000
FY 2018 7.0% 0.4860 $452,500,000
FY 2019 5.0% 0.5008 $492,700,000
FY 2020 5.0% 0.5192 $540,100,000

This chart assumes that property values and tax rates would both increase at the same time. If that were to happen, it would be in stark contrast from current policy, which has been to reduce the tax rate somewhat, to offset the increase in property assessments. In any case, the City’s O&M revenues are projected to increase 40.1% over the five years. When you look at percentage increases, keep one important factor in mind. As the base dollar amount continues to increase, the percentage applied to that base derives a progressively increasing amount. The same is true of your home valuation and your tax increases. The taxable amount of your home value is capped by law at 10% per year. So, if your home started out a few years ago being valued at $200,000, the 10% cap meant that you could only be taxed at $220,000. That’s a $20,000 increase. But once the value of that same home has doubled to $400,000, then the 10% cap yields a taxable value that is $40,000 higher. This year, as the TCAD map shows, Austin has many zip codes with home appraisal increases into the double digits. Click or tap the image to enlarge it.

That’s all the more reason why our City and County officials need to come together and decide on an affordability agenda to be incorporated into their upcoming budgets. A failure to adopt meaningful near-term and long-term reforms would only intensify our already critical economic divide.

Should We Vote to Approve Bonds for a New County Courthouse?

There is no question that Travis County needs a new Civil and Family Courthouse. It is my understanding that no other area taxing entity will place any additional bonds on the November ballot. The current price tag is pegged at $291 million. But Travis County officials are working feverishly to come up with strategies to offset the cost. Discussions have included using fees from after hours parking at the courthouse, certain rental receipts from other County properties, and the sale of other County owned land. Between now and the November election, we will know more about the total amount of those offsets. In addition, the firm that is awarded the contract to build the courthouse could potentially make some design changes that would make the project more efficient.

No decision has yet been made as to whether this blog will endorse the courthouse bonds. But I am hopeful that both the City and the County will join together and demonstrate to the community a serious commitment to affordability. The Travis County Commissioners that I have met with have laid out some innovative ideas for cost-savings, through County-specific initiatives as well as cooperative strategies with the City. Both bodies have appointed representatives to the Regional Affordability Committee. At my suggestion, that committee has embarked on the development of an Affordability Strategic Plan. If the local voters are shown that affordability efforts will finally bear fruit with tangible results, then they are much more likely to stand behind the County Commissioners’ recommendation and vote to approve the courthouse bonds.

Dancing To The Taxpayer Blues

By Bill Oakey – May 29, 2015

A long tall Texan got into his pickup truck and switched on the radio. He listened to the following commentary from a country music deejay down in Austin.

Now folks, I don’t get into politics on this show, but I heard about something the City Council said that I think you should know about. They were talking about an unlevel playing field for property taxes.  Something about the system that isn’t quite right.

Maybe they have a point.  Have you ever sat down in a Texas dance hall and tried to hold onto a beer when the table wasn’t level? Worse case scenario, you would spill some of that beer on your best friend’s wife, right after you danced to “The Last Cheater’s Waltz.” I think we need the City to level our taxes.

I have a nutty friend who spends a lot of time reading City financial reports. Darned if he didn’t tell me that the City Manager is promising once again to “hold the line on the tax rate.” Man, they’ve been pulling the wool over our eyes every year on that stuff. Willie Nelson, Norah Jones and Wynton Marsalis nailed it with the song, “Here We Go Again.” Isn’t there supposed to be some kind of truth in taxation?

The high taxes have priced people so far out into the suburbs that it’s a wonder more of them don’t fall Asleep at the Wheel while sitting in traffic. I can see why the character in George Strait’s song, “All My Ex’s Live in Texas” now hangs his hat in Tennessee. He couldn’t afford his Austin taxes.

And it keeps getting worse. The end of year tax deadline is not a whole lot of fun. In 1974, Merle Haggard released a sad but hopeful tune called, “If We Make It Through December.” He must have known what was coming down the pike in Austin.

All right folks, it’s time for me to get off my soapbox and get back to some more hit music. Here’s one I think you’ll enjoy called, “When I’m Under the Table, I’ll Be Over You.”

hat

City Council Unanimously Approves Commercial Tax Appraisal Challenge

By Bill Oakey – May 28, 2015

In a historic move likely to elicit statewide attention, The Austin City Council on Thursday voted unanimously to proceed with a formal challenge of commercial property valuations to the Travis Central Appraisal District (TCAD). Several citizen speakers, including Leigh Murrin with Real Values for Texas and Vicki Totten with Austin Fair Tax spoke eloquently in favor of the challenge.

The rallying cry from both citizens and our Council Members this afternoon was all about fairness. In my view, this decidedly bold step will enable our City to shine a beacon for fairness across the state. Mayor Steve Adler summed up the sentiments when he stated that “Everyone here on the Council dais agrees that our appraisal system is broken.” What Austin has done will inspire other cities to sit up and take notice that the battle has begun. We all recognize that comprehensive tax reform must be done through the State Legislature. Although that task has seemed insurmountable in the past, we now find ourselves on a firm path toward that goal. People seeking to galvanize the spirits of taxpayers across the state have witnessed the lighting of the spark today. With a lot of hard work yet to come, our sights are already fixed on the 2017 legislative session.

Mayor Adler has signaled a strong desire for a spirit of cooperation among the various taxing jurisdictions impacted by today’s decision. Discussions are underway with various involved parties to ensure that each taxing entity is kept in the loop at every step of the process.  Earlier concerns expressed about potential delays in tax roll certifications and possible interruptions in revenue disbursements are being addressed quite satisfactorily. One solution being considered is to send estimated bills to taxpayers, so they can make their annual payments at the usual time and still claim their Federal income tax deductions.

We must all keep in mind, however, that the opponents of this action will be working every bit as hard to counter the success of our challenge. On that note, we are fortunate to have new City leadership with good experience and expertise. Mayor Adler, who brings many years of legal practice to the table, has established a cooperative tone at the outset. And by voting unanimously to support the appraisal challenge, the entire City Council approaches the endeavor on a united front.

Several City Council Members mentioned the compelling need to address affordability in Austin. They acknowledged that rapidly escalating tax appraisals are an oppressive burden for long-term residents, including many in our minority communities. It was also announced today that TCAD staff and City officials will work together over the next two weeks to take the necessary steps to ensure that the challenge does not impede the critical functions of each taxing authority. TCAD has assured everyone that no adverse effects will happen during that initial two-week period.

On Friday morning at 10:00 AM the Travis County Commissioners Court will meet in executive session to consider their role in Austin’s appraisal challenge.