There is no doubt that a tax rate election to pay for necessary city services will be on the ballot in November, especially in light of today’s thorough budget discussion. The Audit and Finance Committee of the City Council unanimously decided to hold a tax rate election (TRE) on Wednesday, and at least nine members of the council have stated support for some kind of one. The question still stands: What will happen if Austinites receive nothing in return, and how much will the city demand of them?
Three alternatives for raising the tax rate are presently being considered by council members: 3.5 cents, 5.75 cents, and 6.75 cents.
Mayor Kirk Watson, who urged CMs to take into account the everyday Austin voter’s concerns with affordability, has decided on the lowest rise, proposing 3.5 cents over the state cap on the message board last Friday.
“We must be careful to lower the risk of losing an election and to provide the best possible balance with affordability, even if we think we can win an election at a higher amount,” he wrote.
Although Mike Siegel and Zo Qadri, who first supported a 7 cent rise in the message board post, have somewhat backed down and now join Krista Laine and Paige Ellis at 5.75 cents, the majority of CMs still favor a bigger increase.
Sen. Paul Bettencourt’s Senate Bill 9 was approved by the state Senate on Wednesday. It would further reduce the tax rate that Austin (and other cities with a population over 75,000) can impose without an election from 3.5 percent to 2.5 percent.
The state is keeping a tight eye on this, as we all know. During a public meeting on Tuesday, Chris Baker, the founder of the Other Ones Foundation, stated, “We have to keep the rails on this thing because we know that there are a lot of people who don’t want property taxes raised at all.” I know that if we ask for too much, we might not receive it, but I also know that if we ask for too little, we will have to start over the following year.
Among all the budget priorities, one has almost unanimous support from the Council and all parties involved: a comprehensive plan of $101 million presented by the Homeless Strategy Office, which supports programs that are losing their remaining pandemic funding and allocates about $33 million to new investments in expanded services and shelter capacity. “This is the first time I’ve ever seen such unity in our homeless response system, with all of the providers agreeing with the Homeless Strategy Office and the Continuum of Care, lead applicant ECHO,” Baker said. “I’ve been doing this work for a long time.”
Caritas of Austin’s Joshua Houston praised the concept but cautioned against it because of the possibility of state meddling outside of the voting booth.
“Given our precarious situation, we urge you to find the Goldilocks path—the path that is just right, the path that has the best chance of succeeding,” Houston added. Having something is preferable to having nothing.
In the event that voters reject a tax increase, Council members Siegel, Laine, Ellis, and Qadri have proposed an IFC that would require Council to approve a budget that eliminates any distinction between TRE and base budget items. This acknowledges that the reality may actually be nothing. Staff would be instructed to find savings across all general fund departments in proportion to each department’s budget share if the TRE failed.
According to the CMs, this guarantees that our city’s democratically established priorities would be upheld despite the drastic, risky cuts that would be necessary in the event of a TRE failure. Additionally, they recommend that staff submit a report to Council by September 25 detailing the cuts that would be necessary to cover predicted deficits until 2030 in the absence of the TRE.
It’s a frightening idea that the CMs claim aims to give some control over where cuts are administered to each department that faces them. Along with reducing wage increases for civilian personnel and ending programs and services that were previously backed by state and federal financing, it mentions programs that provide housing, health care, fire protection, youth programming, climate employment, library services, and animal care in order to balance the budget. The well-liked Homeless Strategy Office plan would also have to be abandoned by the city.
A separate group of Council members recommended Wednesday in a joint communication that a 6.75-cent rise is required notwithstanding this reminder.
There is more to fiscal responsibility than a single year’s budget. Do we accept more people living on our streets later, or do we defend our social safety net now? Do we address mental health issues now, or do we increase funding for paramedics and police to handle the fallout later? Council Member Chito Vela wrote. (Notably, a $218 million police union contract that will increase pay by 28% over five years is partially to blame for the city’s budgetary difficulties. It was accepted by all members of the dais in October, with the exception of Qadri, who was concerned that it would reduce city-funded social services.)
Along with Council members Jos Velsquez and Ryan Alter, he and Mayor Pro Tem Vanessa Fuentes defend Austin’s previous efforts to keep property taxes low and explain how the state government played an excessive role in the necessity of this TRE.
Alter stated that this budget has the option of upholding our principles or adopting a slash-and-burn strategy at the state and federal levels.
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