Despite revenue caps, Travis County moves ahead with pay hikes

Travis County government spending has not increased much in recent years. Expenditures over the past two years, when the Commissioners Court voted to increase property tax revenue by 6 percent and 5 percent, have been unusually high. The court has gone to 5 percent or higher in only seven of the past 25 budget cycles.

That puts the county in a stronger position than, say, the city of Austin, to respond to the revenue caps recently signed into law by Gov. Greg Abbott. The new caps will limit the year-over-year property tax revenue growth to 3.5 percent, unless voters approve a referendum authorizing a larger increase.

Despite the county’s relative frugality, it must significantly curb its spending in the coming years to comply with the new state law.

“Two or three years ago, we said you were growing at approximately 6 percent per year,” Jessica Rio, who heads the Planning and Budget Office, told the Commissioners Court at its June 18 meeting. “You have slowed that growth down over the last few years to almost 5 percent. We are going to need to slow that growth down again to almost 4 percent. So I want to put an emphasis on that: That does mean some hard decisions in the upcoming budget cycles.”

County Judge Sarah Eckhardt underscored the significance of that warning: “That is a 20 percent slowdown in our growth projection. We are going to have to find a way to live within an envelope that is 20 percent smaller.”

While the county must slow down its spending, demand for services will grow as the population continues to rise.

A report by Standard & Poor’s, the credit rating agency, warned in a recent analysis that the state’s new revenue restrictions could jeopardize the AAA bond rating Travis County and many other local governments in Texas currently enjoy.

“Revenue loss from the new legislation has the potential to create structural gaps in future years, particularly in circumstances where economic growth is stagnant,” said the report. The good news for Travis County is it is expected to continue enjoying rapid economic growth.

The new revenue limits won’t kick in until next year, meaning the court will be able to increase revenue by up to 8 percent in the upcoming 2019-20 budget, which it will approve in September. Commissioners have signaled they will likely go all the way up to the limit to get as much revenue as possible before the new limits take effect.

Despite bracing for lean times, the Commissioners Court is planning to raise pay for many county employees, as recommended by the human resources department after conducting a market salary survey comparing Travis County employee pay to that of workers at other local government entities, such as the city of Austin and the University of Texas.

Those getting raises include the lowest-paid workers, whose pay will rise from $13/hour to $15/hour. Hiking the minimum wage alone will cost the county $715,000 a year, while the cost of implementing all of the raises recommended by the market salary survey will be around $4.8 million.

With decidedly less enthusiasm, the court also voted to increase the salaries of the county’s elected officials, including themselves. The commissioners will see their salary rise by $15,189 to $134,697 while the county judge’s salary will increase by $14,898 to $155,843. Those raises were recommended by the HR department to bring the commissioners’ pay in line with that of their peers in other large counties.

Eckhardt regretted that the salary bump was so great, but said that was the result of avoiding the politically troublesome decision in past years.

“It’s super embarrassing to talk about your own pay,” she said, “but that’s what our job is.”

Eckhardt would have preferred to phase in the pay raises gradually, but because revenue limits will take effect this year, it’s better for the county to implement the pay hikes now, she said.

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