Tag Archives: Austin tax appraisals

Rail Bond Vote Would Bring Historic Tax Increase

By Bill Oakey – July 30, 2014

If anyone thinks the property tax impact of an annual City Council budget battle is something to worry about, please consider this.  For the last two years, the budget discussions have centered around changing the City’s tax rate by a tiny fraction of one penny.  That’s because our tax appraisals have skyrocketed, meaning that even a zero change in the tax rate would yield a considerable tax increase.

Well, make sure you are sitting down when you read this.  If voters approve the $1 billion urban rail and road bond package in November, they can say hello to a 6 cent increase in the property tax rate over the next five years.  The sobering details are contained in a City document called “General Obligation Bond Capacity Analysis.”  You can read it here.

What Would Happen to Our Bond Debt If the Rail Bonds Pass?

That’s an easy question to answer.  It would flat out double!  Our current general obligation debt, made up of previous bond votes for roads, parks, libraries, open space, and housing stands at about $1 billion.  So, in one fell swoop we would double our debt by voting for the rail and road package.  And the worse part is that it would do essentially nothing to relieve traffic congestion for most existing residents.

In fact, Austin won’t even come close to attaining the ridership levels needed for Federal funding for the urban rail line unless we reach extremely optimistic, massive growth projections. The developers pushing for the rail line from Riverside to Highland Mall would need to convince voters of the “miracle” in economic development potential that the project would bring. And yet, as one Austin American-Statesman reader wrote to the editor recently, “Well, thank goodness they are building a line from Riverside to Highland Mall, because I travel between those two points all the time. SAID NO ONE EVER!”

What the City Report Says About Taxes, the Debt and Our Bond Rating

Here is a snapshot of some of the report’s most significant facts and conclusions:

1. Our current general obligation debt is about $1 billion.

2. We still have an additional $425 million in 2006-2013 bonds left to issue.

3. The City estimates that another $425 million will be needed in a separate bond election in 2018, on top of the $1 billion in rail and road bonds to be voted on this November.

4. In order to preserve our AAA bond rating, we would need to raise property taxes by 6 cents between 2015 and 2020 if all of the bonds pass.

5. Not only would the property tax rate increase by 6 cents, but the City estimates that property tax appraisals will jump by over 25%!  Their example shows a $200,000 home being assessed at $255,000 by 2020.  So, the tax impact would multiply exponentially.

Don’t Forget About All the Other Tax Increases!

None of the above estimates include the back to back tax increases for the main part of the City Budget, plus utility rate increases and add-on fees, and taxes for AISD, Travis County, ACC, and Central Health.  And don’t forget that ACC will be asking for a $386 million dollar bond package this November as well.

So, as long as your career is rocking along with huge pay raises every six months or so, or your retirement income is zooming past inflation and leaving you with extra piles of cash, then you can easily afford to vote for the rail bonds.  But if you’re like the vast majority whose income is flat or even decreasing, then make sure you pass this information along to your friends and ask them to cast a resounding NO vote in November.

Austin Leaders Should Unite Behind Tax Appraisal Reform

By Bill Oakey – June 4, 2014

The Travis County Commissioners Court took the first step on Monday toward meaningful action on tax appraisal reform.  Thanks in large part to the efforts of commissioner candidate, Brigid Shea, the Court is seriously exploring whether to legally challenge all of the commercial tax appraisals in Travis County.  Two stunning facts tell the story of gross inequities in the current system:

1. Commercial property is currently being assessed at only about 60% of its market value, thanks to a gaping loophole in State law.

2. The Travis Central Appraisal District is out-gunned by high priced lawyers who often sue in court and win if those property owners don’t get the appraisals they want from TCAD.

The end result is that residential homeowners get the shaft.  And with Austin taxes hitting unsustainable levels, local leaders are speaking out on the need for reform.  If the County Commissioners follow through with their challenge, the entire state will take notice, and regardless of the outcome, the Legislature will be confronted with the issue come January.

County Judge Sam Biscoe stated after the discussions in executive session on Monday that a lot of legal questions will need to be answered before commissioners can decide whether to take action.  A formal challenge would trigger the need to find out what set of appraisals the City, County, and other taxing entities would use for tax collections in the upcoming year.  A potential delay in tax collections could jeopardize the chances of a challenge being filed.  The issue will return to the Commissioners Court on June 17th.  At that time, homeowners will be given an opportunity to speak.

City Council Member Kathie Tovo has scheduled an item for the City to consider an appeal as well.  What would really be helpful would be a coordinated effort, including AISD.  The year of 2014 apparently marks the tipping point where citizens and local leaders have finally gotten the message.  Austin cannot continue to grow and maintain a booming economy unless there is available money to pay for services.  Homeowners cannot be expected to carry a lopsided portion of that burden.  It’s not even a matter of whether they WANT to pay.  The fact is that rapidly increasing numbers of them simply can’t afford to pay any more.

Mayoral Candidate Steve Adler Adds His Voice To The Call For Reform

I especially appreciate the comments that Steve Adler made on Monday in his handout to the packed crowd of frustrated homeowners at the Commissioners Court on Monday:

“Residential property owners are being unfairly burdened with property taxes. The city and local governments should have challenged the system years ago. There is nothing new about this problem and it is good to see Travis County considering action now.”

“Politicians should be honest when they talk to taxpayers about raising taxes, regardless of what they do with the tax rates. Taxpayers deserve truth in taxation.”

Mr. Adler’s characteristic breadth of scope in approaching complex issues will place him ahead of the pack when it comes to tackling property tax issues.  His experience working in the Legislature will help with respect to appraisal reform.  And he has made it clear in discussions with me that he would not tolerate the deceptive City Hall practice of hiding behind the tax rate during annual budget deliberations.  It was Steve Adler who brought to my attention the fact that the 7/10 of a cent tax rate reduction in the City Manager’s budget forecast actually adds up to a 5.5% tax increase.

I was reminded of John Kerry’s comment in his acceptance speech at the 2004 Democratic National Convention, “Imagine a President who believes in science!”  Well, how about this.  “Imagine a mayor who believes in truth in taxation!”

If This Is A Chess Game, What Is The Next Move?

By Bill Oakey – June 2, 2014

If you often feel like a pawn in somebody else’s chess game, you are not alone.

The Players are looking down at Us from their perches on the upper floors of the tall towers. Those towers are all over the country, and even in some places overseas.  They can see us on their super-HD computer screens.  I’m not talking about literally seeing us through the cameras on our computers.  I’m talking about the figurative representations of us.

They are the kings and the queens, the rooks and the knights.

We are the pawns.

The City of Austin is just one ledger on one page in their impressive portfolios.  Of course, there are more of these viewing stations in downtown Austin than there are in New York, California , and Dubai.  But the objective is the same.  Move the pieces on the chess board around.  And try to outwit the opponents.  Try to make as much money as they can as fast as they can.  If only those gosh darned pawns didn’t get in the way sometimes!  They could make even more money.

We are the little dots seen slogging through the crowded streets, trying to get to work, to the grocery store, or perhaps over to Barton Springs, if only we could find a parking place.  And then slogging back home again to get some rest.  Before getting into the game all over again the next morning.

The Players have to be pretty worried right now.  Our tax appraisals were not a pretty picture. The news media is telling them that we have been observed acting restless.  So, what does that mean?  What will They do if We fall victim to the simple laws of economics?  No amount of maneuvering on the chess board can change the fact that we only earn X amount of income.  We can only afford so much in taxes.  We can only afford to vote for X number of bond elections.

The economy is part of the game too, but it is a Silent Player.  Just like Mother Nature is silent. You can’t do anything about the weather.  And when the economic scales get tipped out of balance, it becomes a desperate race against time.

Can The Players find enough new pawns to replace the estimated 40 current pawns who are leaving Austin every day?  Can they build enough self-enclosed “apartment communities” where the lowest rent for a one bedroom apartment is $1,375 per month?  These places have secured club rooms, open terraces with views, green lighting, and DNA testing for dogs.  You read that right.  If you find dog poop on your doorstep, THEY know whose dog did it. They have everybody’s dog’s DNA.  (I’m not making this up!  I saw it last night).

They want you to sell your single-family house so they can scrape it off and add another “apartment community” to their portfolio.

But what will happen to Them if the economy and Mother Nature don’t cooperate?  They have to scrambling to find a solution to the drought problem.  (I have to wonder how They feel about the proposed 30% water rate increase, with a new “drought fee” added to it).

Reports keep popping up in the news, stating that too many of Us are have stagnant wages and we can’t keep up with the costs of living in Austin.  So, I will end with the same question that I started with.

If this is a chess game, what is the next move?