Projected city budget remains under rollback rate for fourth year in a row

It’s budget time at the City of Austin, and the preliminary numbers are in.  Budget officials are currently projecting a potential $50.04 annual increase in property taxes for the average homestead, which has risen in value to $183,133.

 

The increase would mark the fourth year in a row that the city has been under the rollback rate. The rollback rate marks the tax increase allowed without necessitating a tax election. City budget staff expects this trend to continue – projecting increases beneath the rollback rate for the next five years.

 

Of course, City of Austin taxes represent only a portion of the amount levied against property owners. When you add in Travis County, Central Health, AISD, ACC and a MUD here and there, the average Austin tax bill is projected to be $4,155 next year. That’s up $238 from this year’s $3,917 bill for the median value home.

 

The largest chunk of revenue for the city comes from property taxes, which contribute 42 percent. The city collects $341.5 million in property taxes, an amount that has increased $28.2 million this year. That figure has increased substantially over the last five years, according to Deputy Chief Financial Officer Ed Van Eenoo.

 

Sales tax revenue has also increased, but less drastically. The city collected $180.3 million in sales tax, which was an increase of $5.3 million.

 

Overall, the city’s FY2014 Budget is expected to be $3.3 billion – up roughly $200 million from last year.

 

Some of that increase can be attributed to 1.5 percent raises for police and civilians alike. Sworn police officers will cost $2.8 million in raises. When added to the $2.4 million in tenure raises, that’s $6.2 million in additional costs. EMS personnel and Austin firefighters have yet to agree on a new deal. Negotiations between Austin firefighters and city have broken down. Unless something dramatic happens soon, they will begin FY2014 under their current contract with the city until an agreement can be reached.

 

At the 1.5 percent rate, civilian increases will add $8.3 million in expenses for the city.

 

The proposition of a 1.5 percent increase is already causing trouble (See In Fact Daily, July 23.) Jack Kirfman, political action coordinator with the local chapter of American Federation of State County and Municipal Employees, told In Fact Daily that his organization would press Council members for a 3 percent salary increase for Austin civilian employees.

 

The city will also be gaining a net of 365 new positions. 47 of those will go toward meeting the unofficial city goal of two police officers for every 1,000 residents. The Planning and Development Review Department will gain 23 new employees who will help keep up with the backlog created by an uptick in development in the past few years.

 

In the last year, the city has seen almost unprecedented development levels, which were aided by some of the first Planning and Development Review fee increases since 1993. This past year, the city saw $19.2 million in development revenue, a number city staff expects to match next year before it settles into a new normal of around $12 million annually.

                                                                           

The budget process is just getting underway, with a work session today. City Council is expected to adopt the budget during the second week of September, with public hearings taking place on August 22 and 29.