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Council OKs measure to consider city’s income growth with budget

Friday, January 31, 2014 by Michael Kanin

Austin City Council members Thursday approved requiring staff to come up with an affordability benchmark to give both staff and themselves more information when making decisions about the city’s budget. Council Member Bill Spelman authored the proposal.


The figure represents how much Austin residents have seen their income increase, on average, over the past year. For 2014, that number is 5.1 percent. Spelman says knowing that number will help budget writers to see the relationship between the growth of the city’s General Fund and citizens’ ability to pay for that increase.


In true Spelman fashion, the he offered a PowerPoint slide that illustrated his concerns. “Total income of all people residing inside the City of Austin has doubled since 1999 – but our general fund spending has gone up by 150 percent, 50 percent higher, 50 percent faster than the income of the citizens of Austin,” he said. “(This) means that we are systematically taking more out of people’s pockets – a larger percentage of their total income has gone to general fund spending.”


Mayor Lee Leffingwell, who co-sponsored the idea, summed the purpose of the figure – which would be refreshed from year to year. “It’s a tool to be able to reference during the budget-making process,” he said. “There is nothing that necessarily needs to be tied to it.”


After the hearing, Spelman told the Monitor that this is indeed the case. He suggested that, given the figure provided, “it would be most prudent if we kept our general fund spending increase to somewhere in the neighborhood of 5.1 percent.” Spelman added that “there is no hard cap” associated with the number.


“We’re all free to interpret it however we like,” he continued. “The reason for providing that information is that we’ve never had that information before us before at the time we were trying to decide on general fund spending.”


Spelman first broached the notion of such a study as he and his colleagues debated the FY2013 budget. During that discussion he issued concerns similar to those he expressed Thursday.


There, however, he framed them by illustrating the growth of the Austin Police Department. “Police are working hard, but spending per capita and spending per dollar are both way up, even though crime rates, non-index offense rates, and 911 call rates are flat or down,” he argued in a presentation shared with this publication at the time. “Police spending accounts for 60 percent of the total increase in (general fund) spending per dollar.” (See Austin Monitor, Sept. 4, 2013)


Later, he called on his colleagues to put a cap on spending at a rate equal to the growth of Austinites’ incomes. “I am concerned that we are systematically doing two things,” he said at the time. “One is that our general fund is becoming systematically more lopsided toward public safety and second that it is becoming bigger and bigger as our proportion of our ability to pay. People who pay that bill have housing needs, transportation needs, food, clothing, entertainment – all that stuff is going up. If the general fund is also taking more and more money out of their budget, that makes the city a little bit less affordable.” (See Austin Monitor, Sept. 10, 2013)



Spelman was not quite as pointed Thursday. Still, when prompted by the Monitor, he went along with a bit of quick math. “A 1percent increase in public safety would be two-thirds of a percent increase in the general fund spending,” he said.


“If one wants to go backward and figure out how we got to where we got, I think it’s clear that the increase in public safety is the primary reason why we are where we are, which is an increase in General Fund spending which is 50  percent greater than the increase in city income,” he continued. “What this item is aimed at is not particularly public safety, or transportation, or parks and libraries, or anything. It’s just aimed at general fund spending generally. That means we that should be focusing on parks and libraries and planning and development review and public safety and everything else if we want to keep that general fund spending at or close to the income increase limit.”


Though Council members unanimously approved Spelman’s study, they openly worried about the implications. As part of Thursday’s discussion, for example, Council Member Laura Morrison wondered about the true nature of income growth in the region. “It would be interesting to know if our income in the city is going up because new people are coming here, or because the average person that lives here at a given moment starts making more,” she offered.


Morrison’s point, of course, goes directly to the heart of many arguments about local growth and the ability of long-time Austin residents to both enjoy and afford it.


Spelman said that he didn’t have that information, but suggested that “a good demographer could come up with a reasonable guess.”

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