Travis commissioners hear latest revenue projections

Even factoring in a proposed three percent increase in the effective tax rate, Travis County’s first projected revenues for next year still fall $4 million short of this year’s revenue—and that gap could grow in the coming months.

 

On Tuesday, County Auditor Susan Spataro presented the latest estimates for this fiscal year and the first glimpse of next year’s numbers. While cautioning that this was a “very broad and very preliminary” look at revenue, Spataro said the volatility of the economic situation made it difficult to project revenue.

 

The primary component of revenue for the county is property taxes, which go into the general fund. Several other funds augment the county budget, but Spataro said they are insignificant in comparison to property taxes.

 

The Auditor’s Office is estimating less return on the county’s non-tax revenue, including development charges, car registrations, criminal fines, fees, and interest on property tax money. “For a while we were earning in excess of 4 percent in interest,” Spataro said, “now treasury bonds are yielding less than half a percent.” In FY09 investment income was $7.5 million.

 

One wild card in the revenue projections is the appeals process on property assessments. That process, adjudicated by the Central Appraisal District, begins June 1 and is resolved by July. “One of the things we don’t know is how many protests will there be, and how many will be valid,” Spataro told In Fact Daily. Once the Central Appraisal District sets the certified values in July, “on that date, that’s the one we use for setting the actual budget.”

 

“I think there will be a lot of appeals this year,” Spataro said, “larger than we’ve ever seen before.”

 

By the end of April, Travis County had collected $358.5 million total revenue from taxes and other sources, with another $30.5 million expected to come in. The county auditor’s office then factored in a rollover sum and looked at expected expenditures and projected a final balance for this year of $54.4 million.

 

On May 22 the county started to receive tax statements from business personal property and inventory. It will be several more days before the auditor’s office can sort through the receipts and compare them to estimates.

 

Further complicating matters is the issue of a rollover fund. The county requires a rollover fund be maintained from year to year, which should minimally equal 11 percent of the balances of the general fund, debt service fund and road and bridge fund. Currently $41 million of revenue is the unallocated reserve. Commissioners could tap into the $13 million difference between the required amount and the $54 million—assuming it is still around—in order to make up the $4 million difference between FY10 and FY09.

 

The general fund revenue forecast for FY10 is $447.068 million and includes the $54.4 million rollover, $322.6 million in property taxes and $70 million in other revenue. Keith called the FY10 estimate of 322.6 million in tax revenue “a very conservative approach.”

 

Spataro said the budget could still be impacted by increased expenditures – for example if jail population increased – and whether or not major taxpaying companies declared bankruptcy.  Judge Sam Biscoe said the report “was pretty much what I expected.” He did add, “The interest thing is a pretty big deal,” saying that a decrease to half a percentage point is a “big drop off… That hurts more than anything else I think.”

 

Spataro was still uneasy as the discussion concluded, “I’m as nervous about this estimate than I’ve been in the 20 years here because so many things are so different than they have ever been before, it’s very difficult to predict.” The county will receive a total of five budget estimates, one a month until October. The next budget estimate is June 30.