Point Austin: Budget Time
Running all the numbers, we have to pay for what we need
By Michael King, Fri., June 9, 2006
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Almost beneath the radar, the 2007 city budget tiptoed in on little cat feet two weeks ago, amidst much noisier matters, like the ongoing McMansion dust-up, the complicated demise of legendary Roy's Taxi, and the final discussions of the November bond election ballot. Having stumbled clumsily into midnight the previous week, the City Council cleared its decks for more convenient public testimony, and somewhat before the witching hour took up the rough shape of the actual ballot (see "Beside the Point"). Although the props themselves look more complicated than necessary, the real news hanging fire this morning (Thursday) is whether the council, during its morning consent agenda, will allow the bond package to grow another $55 million or so – a possibility hinted at from the dais last week – to accommodate audibly broad public support for deeper capital investment than the current $536 million package would allow. As Brewster McCracken put it, amplifying a suggestion from Raul Alvarez, "So that's less than a dollar a month, and you could get ... $50 [million] to $60 million more then, for less than a dollar a month [in property taxes] for the median Austin homeowner."
Judging only from the draft ballot, which holds the total package at the staff-recommended level, it looks like the members flinched when it came to actually boosting the numbers. If so – and I'll be glad to eat my words next week – the greatest loser appears to be open space, which left the citizens bond committee with an enthusiastic $90 million and has now diminished to a rather paltry $30 million in the version city staff folded into parkland acquisition ($50 million altogether). Affordable housing was also cut, although not as much (from $67.5 million to $50 million), although that adjustment is at least defensible on the grounds that the city is still trying to figure out, step by step, how best to spend the money. The open space acquisition is more straightforward – the more money available now, the more land and conservation easements to be acquired (even as prices continue to rise) and the stronger hedge against future sprawl in the Edwards Aquifer watershed.
The apparently diminishing dollars for open space does raise the question of what might have happened if the environmental community had been united in advocacy throughout the bond process, instead of factionalized and distracted by the disastrous charter amendment campaign. Spending all that political capital (and a good deal of the ordinary kind) to beat up the council for months – in a badly losing effort – left the Springs' self-appointed defenders two weeks ago with precious little moral authority to speak on the city's environmental responsibilities.
Not that they seemed to notice.
The To-Do List
Like the bond initiative, the budget process is always a tale of competing needs, and the initial policy discussion that took place last week was no exception. The city is still emerging from a series of extremely lean years, and even though the staff is estimating a rise of roughly $38.1 million in income – to total revenues of $519.7 million – the numbers also foretell a $40.3 million increase in anticipated expenses. (The increases are what City Manager Toby Futrell likes to call "cost drivers" – rising health care costs, contracted pay increases, required personnel additions.) That makes for an effective $2.2 million deficit before they've even considered adding a single item, and in light of the major cuts that took place over the last several years, there's plenty on the to-do list.
Futrell calls these proposals "strategic add-backs," to acknowledge the fact that we're making up for lost ground (while the city continues to grow). The working total is a relatively paltry $7.2 million (reduced from more than $20 million in actual staff-assessed needs), with these highlights:
• Community Services, $4.1 million – This is a broad-brush category that includes such things as animal shelter staff (cut by 10% while intakes are up 17% since 2002); a second day-labor site, in South Austin where the visible need is growing; inspection and zoning staff (with construction applications exploding); library and rec center personnel (cut radically during the downturn); even pay raises for lifeguards (untouched since 1999). (Might also be called "CDBG Substitute," because federal community development block grants have been radically cut under the Bush administration, leaving cities in the lurch.)
• Public Safety, $2.4 million – adding forensic and property crime technical staff in place of more expensive officers needed elsewhere; adding EMS staff (53 paramedic vacancies), and replacing outdated firefighting equipment.
• Support Services, $0.7 million – a quite minimal response to $17 million cut citywide in 2003, to positions in purchasing, library, auditing, legal, etc. while the workload continues to grow.
Everything That Rises
Futrell's "bare-bones" numbers were based on taking advantage of the current rise in sales tax revenues while maintaining the "effective" property tax rate – that is, the rate that would bring in the same amount of revenue as last year. But that number – currently estimated at 40.62 cents per $100 evaluation – is in fact nearly four cents lower than the current (nominal) rate of 44.30 cents, i.e., what property owners are actually paying already. Each additional cent is expected to generate roughly $5.8 million in new revenue, which means that a relatively modest increase over the effective rate – corresponding to a cut in the actual current tax rate – would easily cover that "deficit" and go a long way toward accounting for those necessary add-backs.
Although Futrell was (perhaps understandably) indirect about that possibility, the council caught the breeze. "In looking at the numbers right now," suggested McCracken, echoed by Lee Leffingwell, Jennifer Kim, and Betty Dunkerley, "we could cut the tax rate by 2.2 cents and still capture all of the efforts that we have made on this council, and the community has made, to build our tax base." Accordingly, the council asked Futrell, when she returns with a proposed budget in late July, to run the numbers based on a rate of 42.12 – that is, 2.2 cents under the current city property tax rate.
But that cautious direction was all it took to set the Statesman editorialists, two days later, fulminating against "raising city taxes" ("Property tax increase," the May 27 headline scowled, "would be wrong move"). Amidst a whole series of misleading statements about the Legislature's "tax cuts" and a gratuitous swipe at Austin ISD Supt. Pat Forgione (supposedly "rubbing his hands in glee" at the prospect of a school tax increase), the daily thundered, "Before adding to the taxpayers' burden, the council must say what it's going to spend the extra money on and defend it."
Note to Statesman: see "The To-Do List" above – one of numerous budget hearings to take place over the next three months. I guess during that part of the meeting, the editors had drifted away from Channel 6 over to Sex and the City. 
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