Proposed TRE Scenario

[Colleen Pate]

Colleagues—
I appreciate the thoughtful, methodical effort and dialogue we’ve had around the budget so far. We’ve heard from the community about the pressing needs that the city faces during this budget process. We’ve also heard during this process the continued concern in our city about affordability.

This council has collectively prioritized putting affordability first and done excellent work related to affordability. I know we all are justifiably proud of our work. We know that our constituents find themselves in a tough financial predicament. To help them, I encourage us to continue to be thoughtful about affordability and concerned about any additional rate and tax burden we place on homeowners and renters.

We are diligent when it comes to affordability in housing and the creation of the Austin Infrastructure Academy to help people with family-sustaining careers. Last week, we diligently looked at (and delayed) rate increases for three utilities—Aqua, Texas Gas Service, and Oncor—because of the potential impact on affordability. We also spent lots of time looking at the impact DSD permitting costs have on affordability and costs like new meters for ADU development. We also built in affordability goals at AE.

We need to apply the same diligence to the impact that increased rates and taxes in the budget will have on people.

At the same time, we have very real service needs in Austin. The needs cost money. From addressing homelessness to maintaining our parkland, Austin is facing critical issues. And our finances have become more difficult for a variety of reasons.

While I see a TRE as needed in these uncertain financial times, I believe it’s important to strike a balance with the cost to Austinites, including those who rent, and its impact on 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. Even if we think a higher amount could win doesn’t make it the best policy.

As you know, the manager’s proposed base budget raises rates and taxes, impacting affordability. It also addresses some of our service priorities such as:

- $12.5 million for Street Outreach Coordinators within the Homeless Strategy Office and funding for the 8th Street Shelter and the Marshalling Yard shelter
- $4.0 million for the emergency rental assistance program
- Increased funding for our Parks and Rec Department to improve parks and cemetery maintenance, youth athletic fields and support for the Colony Park pool
- 4% cost-of-living adjustment for our city employees, with a living wage for hourly employees at $22.01
- Staff support for storm drain repairs and vegetation maintenance
- Establishes a Human Rights Division focused on outreach and engagement for Austin residents
- Austin Energy is adding $3.7 million to its Customer Energy Solutions rebates, incentives, and solar program

Beyond the proposed base budget, I’m sharing a proposed scenario for a $0.035 tax rate election that provides for basic city services and still places an emphasis on affordability. It doesn’t do all that I would like to see us be able to do in terms of funding services, and it also adds to the tax burden. But my hope is it offers voters a balanced way to preserve some important services while minimizing the damage on our affordability efforts.

http://assets.austintexas.gov/austincou ... 111219.pdf

Highlights from the proposed plan:

- Fully fund the Homeless Strategy Office plan (fully funding HSO has been a deep focus of every member of this council)
- $1.0 million for wildfire mitigation
- $3.0 million for the Austin-Travis County Emergency Medical Services
- $3.5 million for the expanded mobile crisis outreach team (EMCOT)
- $3.8 million for parkland maintenance

While I believe this proposal has the right emphasis and has important balance, the funding item that I most wish it included is the potential for a cost-of-living adjustment for our city employees in future years.

I urge us to affirm our commitment to making Austin affordable. It’s not easy in tough budget times. I believe this proposal, while not perfect, is balanced and one Austinites can support. I look forward to having these discussions as we continue to go through our budget process.

Thanks—
Kirk

On Behalf of Mayor Watson

[Ryan Alter]

Colleagues,

Austin is facing a critical moment. The federal government is slashing our social safety net, cancelling infrastructure improvements, and threatening that these cuts are just beginning. The state, despite having record surpluses, continues its refusal to meet its basic obligations to the public, while pushing more responsibilities on cities, but handcuffing their ability to meet those needs.

But unlike the state and federal government, Austin cannot and will not abandon its duty to the public. Because of these draconian cuts at the federal level, and without the state fulfilling its duties to Austin, we are faced with a hard decision – adequately address the pressing needs of Austin through a tax rate election, or slash homelessness, affordable housing, and public health programs.

Such a decision does not happen in a vacuum. We recognize the affordability challenges Austinites feel every day. When it comes to taxes, we must recognize that the greatest increase in local taxes over the past 10 years has been because of the state’s failure to adequately fund our public schools, requiring them to go to taxpayers to pay our teachers and keep our schools open.

The City, which accounts for about a quarter of the tax bill, has been very focused on keeping taxes low for residents. Consider the average home today – valued at $494,803. Ten years ago, the City taxes on a home at this price were $2,134.41. Today, under the proposed budget, that $494,803 home would pay $2,074.28 in City taxes – $60 less! That’s been made possible because in that time, the Council has implemented a 20% homestead exemption, added an additional homestead exemption for seniors and disabled residents, now set at $192,000, and seen rapid growth in commercial development, expanding the tax base.

Unfortunately, we cannot grow our way out of the needs of our community. The artificial cap on raising revenue placed on the City by the state has led to our budget not even being able to keep up with inflation, let alone account for the growing needs of a growing population. That’s why we are proposing a 6.75 cent tax rate increase that would accomplish the following:

1. Truly and fully fund the City’s plan to combat homelessness by including “upstream” elements that keep people housed or quickly get them back into housing;
2. Not only maintain, but expand, the City’s commitment to affordable housing programs;
3. Properly value our public employees to provide vital services to the public through future wage increases;
4. Take a significant step forward to meet basic park maintenance needs so bathrooms can be cleaned, swing sets fixed, and grounds maintained;
5. Make smart investments in climate resilience by reducing the City’s energy usage and emissions, while producing long-term climate and fiscal benefits;
6. Preserve our social safety net programs that provide critical support to our kids, families, seniors, and marginalized communities, while advancing community health;
7. Enhance public safety through innovative programs that reduce crime, improve response times, and better align the response type with the severity of the need; and
8. Enrich the cultural fabric of Austin through arts and cultural programs.

http://assets.austintexas.gov/austincou ... 162056.pdf

This is not a finished product, and we look forward to seeing the priorities of our colleagues. Only together can we craft a final budget that meets the needs of each district and our community as a whole. We must meet this moment head-on, not DOGE our responsibilities.

Sincerely,
MPT Fuentes
CM Velásquez
CM Vela
CM Alter

[Colleen Pate]

Council:

I am including an update of my proposed TRE scenario that I posted last Friday morning. The only difference is the Marshalling Yard Emergency Shelter line item has been reduced to $2,750,000. This is due to the $5,250,000 from the updated tax roll that is dedicated in the base budget to the Marshalling Yard Emergency Shelter.

http://assets.austintexas.gov/austincou ... 165810.pdf

Thanks,
Kirk

On behalf of Mayor Watson