Ahead of Thursday’s comprehensive budget discussion, there is almost no question that a tax rate election to fund essential city services will be on the ballot come November. At least nine City Council members have expressed support for some level of one, and Council’s Audit and Finance Committee voted unanimously to hold a tax rate election (TRE) on Wednesday. The question remains: How much will the city ask of Austinites – and what will happen if they get nothing in return?
Council members are currently weighing three options for tax rate election increase: 3.5 cents, 5.75 cents and 6.75 cents.
Mayor Kirk Watson has settled on the lowest increase, advocating 3.5 cents over the state cap on the message board last Friday, urging CMs to consider the everyday Austin voter’s struggles with affordability.
“Even if we believe we can win an election at a higher amount, we need to take care both to reduce the risk of losing an election and to provide the best possible balance with affordability,” he wrote.
Still, most CMs are partial to a higher increase, though some that originally advocated in a message board post for 7 cents, Mike Siegel and Zo Qadri, have come down a bit, instead joining Krista Laine, Paige Ellis at 5.75 cents.
Meanwhile, on Wednesday, the state Senate passed Sen. Paul Bettencourt’s Senate Bill 9, which would further lower the rate at which Austin (and other cities with a population above 75,000) can levy taxes without an election from 3.5 percent to 2.5 percent.
“We all know the state is watching this very closely. We know that there are a lot of people that don’t want property taxes raised at all, and we have to keep the rails on this thing,” said Chris Baker, founder of the Other Ones Foundation, in a public hearing Tuesday. “We ask for too much, we may get nothing, but I also understand that if we ask for too little, we’re scrambling again next year.”
Out of all budget priorities, there is one that has near-unanimous support from Council and the stakeholders involved: a $101 million comprehensive plan outlined by the Homeless Strategy Office, that props up programs losing the last of their pandemic funding and pours roughly $33 million into new investments in expanded services and shelter capacity. “I’ve been doing this work for a long time and I have never before seen such unity in our homeless response system, all of the providers being in agreement with the Homeless Strategy Office and with the Continuum of Care, lead applicant ECHO – it’s never happened before,” said Baker.
Joshua Houston, who is with Caritas of Austin, expressed support for the plan, but urged caution given the “risk of state intervention… beyond the ballot box.”
“We urge you to find the Goldilocks path, the path that is just right, the path that is most likely to succeed given our precarious situation,” said Houston. “We would rather have something than nothing.”
In an acknowledgement that the reality may really be nothing, in the case that a tax increase isn’t approved by voters, Council members Siegel, Laine, Ellis, and Qadri have introduced an IFC that would have Council pass a budget with everything on a “level playing field,” meaning there would be no distinction between base budget items and TRE items. If the TRE doesn’t pass, Council would direct staff to identify cuts across each general fund department, proportional to each department’s share of the budget.
“This ensures that our city’s democratically determined priorities are maintained in the face of the deep, dangerous cuts required in the event of a TRE failure,” the CMs write. They also suggest that staff return to Council by September 25 with an account of what cuts can be expected to make up projected deficits without the TRE until 2030.
It’s a sobering proposal that the CMs say is an attempt to give each department facing cuts some control over where they are implemented. It names “programs providing housing, health care, fire protection, youth programs, climate jobs, library services, and animal care to balance the budget” as well as “cutting pay raises for civilian employees and discontinuing programs and services previously supported by state and federal funding.” And, the city would have to forgo the popular Homeless Strategy Office plan.
Despite this reminder, another group of Council members urged Wednesday in a joint communication that an increase of 6.75 cents is necessary.
“Fiscal responsibility is about more than just one year’s budget. Do we protect our social safety net now, or do we accept more people living on our streets later? Do we tackle mental health now, or do we pay more for police and paramedics to deal with the consequences later?” wrote Council Member Chito Vela. (Importantly, part of the city’s budget constraints are thanks to a $218 million police union contract that will raise pay by 28% over five years, that was approved by all on the dais last October except Qadri, who feared it would “chip away” at city-funded social services.)
He, Mayor Pro Tem Vanessa Fuentes, and Council members José Velásquez and Ryan Alter defend Austin’s past attempts to keep property taxes low and explain the state legislature’s outsized role in the need for this TRE.
“This budget can either live up to our values or follow the slash and burn approach at the state and federal level,” wrote Alter.
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.