Updated: Cronk proposes $4.2 billion budget, more help for homeless

“This year, our mission is to build on these successes while at the same time bracing our city’s budget against the future impacts of the state’s decision to lower the cap on local property tax revenue growth,” City Manager Spencer Cronk said, explaining the city’s plan to go to the 8 percent rollback rate for property taxes.

Budget staff proposed that the city go to the maximum tax rate (without an election), known as the rollback rate, which is 8 percent higher than last year’s rate. They are proposing a tax rate of 43.86 cents per $100 valuation.

This is the final year that the city will be able to raise taxes by 8 percent without voter approval. The Texas Legislature acted this spring to limit future tax increases to 3.5 percent, despite dire predictions from cities and counties.

“Although the daunting challenges posed by the revenue cap are real, we can mitigate much of that damage through careful financial management and by remaining laser-focused on our highest community priorities while continuing to create further operational efficiencies,” Cronk told City Council.

Cronk revealed his budget plan to Council and the community this afternoon during a speech at LifeWorks.

Under Cronk’s proposal, the non-senior owner of a median-valued home would pay close to $100 a year more in taxes than they did last year. According to the Travis Central Appraisal District, that median-valued home has an assessed value of $358,955. That value includes the 10 percent homestead exemption, according to budget guru Ed Van Eenoo.

Under the same proposal, a senior citizen living in a house valued at $400,000 would pay about $113 more in the upcoming year than they paid this year.

Going to the rollback rate would give the city time to seek new revenue sources, Cronk said, and “to have the difficult conversations as a community about where services can be reduced or possibly cut.”

In line with directions from Council, Cronk is also proposing that the city spend $62.7 million in the 2019-20 budget in support of ending homelessness in Austin. That amount includes $42 million of planned spending from the 2018 affordable housing bond and more than $15 million for the Housing Trust Fund, in support of workforce development providers and relocation services for tenants displaced because of code violations or decisions by property owners.

The city is proposing no changes in electric rates, water rates, Austin Resource Recovery fees, drainage fees or transportation user fees.

Cronk is proposing to spend $15.3 million for one-time investments, which would not be possible without going to the rollback rate. Budget writers stress it is important to go to the rollback rate this year, because next year’s rate will use this year’s rate as a starting point.

By using the rollback rate this year, budget writers project a balanced budget in Fiscal Year 2021. However, the following year, the gap between funds collected and city expenses would grow to $7.8 million.

At one penny below the rollback rate this year, Van Eenoo said the gap between city expenses and the amount of property taxes the city could raise with the 3.5 percent cap would be $16 million. That gap would increase to $24.8 million in the next fiscal year and grow to $45.7 million by Fiscal Year 2023-24.

Last year, Van Eenoo proposed raising extra cash and setting it aside in case the Legislature lowered the rate cap, but Council found many needs and rejected the proposal.

Van Eenoo explained that the $4.2 billion budget includes the proposed General Fund budget of $1.1 billion, which includes support for public safety, parks, libraries, neighborhood health centers and the city’s animal shelter.

The budget includes a 2.5 percent pay raise for civilian employees as well as 2 percent raises for police and emergency medical services employees and 1 percent for firefighters. The raises for police, firefighters and EMS are set by contracts.

Budget staffers are proposing that the city hire 30 new police officers this year at a cost of about $3 million. Those numbers will not make many police advocates happy. However, the proposed budget allows for 32 victim services counselors – two more than the city currently has.

Cronk is also proposing a $1 million increase to the budget for processing DNA evidence including sexual assault kits, bringing that budget to $2.6 million. Residents near Del Valle have been pushing for a fire station in the area for some time and the proposed budget includes $15 million for a new Del Valle fire station, projected to open next summer.

Austin Energy is projecting a budget of $1.4 billion, which is supported by users of its services, as are the budgets for Austin Water, Austin Resource Recovery and the Development Services Department.

Update: Following the presentation, Mayor Steve Adler told the Austin Monitor that he was excited about the proposed budget and all that was included under a total increase of 2.5 percent (including city taxes and fees). He said the increased funding for homelessness services – which brings the budget to $63 million, $17 million more than the prior year – was “historic.”

“I hope it will serve as a rallying opportunity for businesses, neighborhoods, faith organizations and nonprofits to really accelerate their efforts,” he said.

Adler also discussed increased funding for public safety, particularly funding that will go toward addressing sexual assault and mental health.

“The state Legislature is going to make it really difficult to do this kind of budget in the future. But we have a year to try and figure this out.

“It would be really nice if our state would help us with the homelessness challenge that exists here, recognizing that Austin’s increase in homelessness was half the rate of increase of Dallas last year,” Adler continued. He noted that the state of California gave $650 million to its cities to help fight homelessness a couple of weeks ago.

Cary Roberts, the executive director of the Greater Austin Crime Commission, praised the proposed addition of 30 police officers, 32 new firefighters, 12 paramedics, two more victim services counselors and increased funding for DNA testing.

“We are very encouraged by the (city) manager’s proposed budget for FY 2020. … As the Austin police chief says, growth is the number-one public safety challenge facing us,” Roberts said. “We’ve been slow to adopt the police staffing plan, but we are encouraged that we are making improvements and we are headed in the right direction.

“Public safety has to be a priority,” he said.

Graphs courtesy of the city of Austin. Updated with comments, written by Elizabeth Pagano.

The Austin Monitor’s work is made possible by donations from the community. Though our reporting covers donors from time to time, we are careful to keep business and editorial efforts separate while maintaining transparency. A complete list of donors is available here, and our code of ethics is explained here.