Budget writers wrestle with tax rates, raises, public safety costs

Early estimates for the FY2014 City of Austin budget project a potential $6.50 monthly increase in property taxes on the average homestead, which the city lists at $189,027. That figure is a rough estimate based on the highest possible tax increase allowable without a tax election, which is called the rollback rate.

 

It’s part of a budget that could be as much as $792 million in revenue and between $784 million and $798 million in expenses, depending on the rate of city employee wage increases.

 

Austin civilian employees have received raises between 2 and 3 percent over the last five years, except for FY 2010, when there were no across-the-board raises. That was a result of the nationwide economic downturn. But city Deputy Chief Financial Officer Ed Van Eenoo said that even at the rollback rate the city can’t raise enough money to give employees a 3 percent wage hike going forward from now through 2016.

 

Like other city employees, sworn officers received no raises in 2010, but in each of the last three years, they have gotten 3 percent.

 

So it is important to note the pending renegotiations of contracts for the city’s public safety employees. These are set to expire at the end of September. Though budget officials hope to have firm calculations for public safety salaries available for this budget cycle, the possibility exists that negotiations will not be completed in time. That would force Van Eenoo to use what he calls a “fairly conservative” number as a place holder.

 

That action could result in budget figures that are far from set by the time Council members vote on them.

 

For their part, city departments are gradually making their respective pitches to various city bodies for unmet needs that would, if approved as a whole or partially, represent additional budget increases.

 

At the top of this list is the ever-present call from the Austin Police Department for more officers. The department argues that it needs a minimum of 45 new hires to maintain the city’s long-running standard of 2.0 officers for every 1,000 citizens. Council Member Bill Spelman has repeatedly questioned the appropriateness of that figure.

 

Spelman, along with Public Safety commissioner Kim Rossmo, have argued for a so-called business case defense – a clear breakdown of officer roles and departmental needs – of APD’s staffing requests. At last month’s Public Safety Commission meeting, Austin Police Chief of Staff David Carter told commissioners that the department lacked the appropriate staff to produce such a study for this year’s budget season.

 

Other notable budget details presented to Council this morning include the fact that the city will begin a transition to a different allocation of expenses for the city’s Economic Growth and Redevelopment Services Office.

 

The change in the funding structure of the city’s EGRSO division is a long-awaited development. If approved, the adjustment would take the sole responsibility of funding the office away from Austin Energy. The city absorbed much criticism during its 2012 rate debate over that allocation.

 

The new method would leave the bulk of the funding responsibility – roughly $5.7 million by the time the shift has been completed in FY2016 – with Austin Energy. The city’s general fund would pick up the bulk of the remaining tab, about $3.6 million. The Austin Water Utility and Austin Resource Recovery would also contribute smaller portions.

 

Van Eenoo said that the allocations are designed to follow the approximate benefits each department sees from Economic Growth activities. The office costs the city just under $11.7 million annually.

 

This morning’s work session is the first formal meeting of a process that is set to conclude in mid-September when Council members set the new city tax rate. It will continue until around noon.