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Adler files for mayor, cites proposal for homestead tax exemption

Tuesday, August 5, 2014 by Jo Clifton

Attorney Steve Adler announced a proposal for a sweeping change in the city’s property tax system Monday as he filed the documents necessary to get a place on the ballot for the mayoral election in November.

Standing before a small crowd of supporters outside the city clerk’s office, Adler said, “This is a great city but we’ve gone from being one of the most affordable to being the most expensive city in the state. And today as a newly filed candidate for mayor of Austin want to announce my support for the 20 percent homestead exemption. It’s long overdue. Travis County did it years ago. It’s allowed by state law. We could’ve done it four years ago. We could’ve done it six years ago…(or) eight years ago. But we haven’t acted. Affordability is a big problem and we need to act.”

Adler proposes adoption of a 20 percent across the board homestead exemption for residential property owners in Austin. He said, “The average homeowner will save about $130 a year, which will help with the current lack of affordability that our city is facing.”

According to Adler, the homestead exemption could be phased in over a four-year period. He also said that he and his wife would not take the exemption for their home.

He noted that there are two ways to pay for the estimated $35 million such an exemption would cost: cut expenditures or raise property taxes in general. Adler said the cost of the proposal would be about one penny per year over four years in property taxes. He said the Council should look at cutting expenditures first, however.

Asked whether his plan would raise prices for renters, Adler said, “We looked at tenants first because that was my first concern. … The conventional wisdom is that if you do this you will really hurt tenants. We actually ran the numbers and after that analysis it looks like the average rental unit would end up paying less than an additional one dollar per month.”

He agreed with the proposition that people who have more expensive homes would benefit more than those with more modest homes, saying that the property tax is regressive. But that is a problem that must be addressed by the legislature, he said.

Adler’s two major opponents, Council Members Mike Martinez and Sheryl Cole both criticized the idea of an exemption without further details.

Martinez said, “Obviously we all are concerned about a rising property tax bill” noting that Council has asked staff to work with them to relieve the property tax burden. He said he expected the conversation to continue today at the work session.

He added, “This is a proposal from someone who in their press release claims to be an expert… but does not give details on what would be cut.” Martinez wondered aloud whether Adler would cut police, fire, libraries or parks to pay for that proposal, saying that the proposal would most benefit the wealthy.”

Martinez said, “Sixty percent of Austinites rent. None of them would receive any benefit from this proposal.

“I think citizens and voters deserve a detailed plan…either our taxes are going to be raised for benefits to the wealthy or our city services are going to be cut to benefit the wealthy,” he concluded.

Cole said via email, “According to Steve, his plan will be ‘revenue-neutral’ and we’re just supposed to trust him on how he’ll get there. That’s $35 million with no plan on the table for how to pay for it. There’s a difference between politics and the responsibilities of leadership I’m not sure he gets.

“Here are the facts: The county does this, but the reality is the city has a much bigger budget because we provide front-line services to the bulk of the County’s citizens — police, fire, EMS, parks, to name a few.

“There’s no doubt the property tax system is regressive, and Steve’s simplistic plan exacerbates that, benefiting the wealthy and mansion owners the most.”

She pointed out that, “Austin has recently implemented an increased homestead exemption for seniors, vets, and the disabled that is indexed and phased in over time. But there’s more that needs to be done.”

 

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