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Leffingwell, Council clash over budget changes

Tuesday, September 9, 2014 by Tyler Whitson

City Council began its 2015 budget adoption reading Monday with Mayor Lee Leffingwell making two unsuccessful motions to reduce the property tax rate. In fact, throughout the day he objected to the majority of Council-initiated operating budget amendments.

Deputy Budget Officer Diane Siler told the Austin Monitor that, at the end of Monday’s meeting, Council had exhausted its critical one-time expenditure fund of $3,319,717 and spent all but $152,520 of the $3,432,427 previously available in the general fund.

Deputy Chief Financial Officer Ed Van Eenoo explained the significance of using all of the available one-time funding. “Council’s adopted a policy that says that in any given year, we will not draw down our stabilization reserves by more than one-third,” he said. Van Eenoo noted, however, that Council could use general funds to pay for one-time expenses.

City Manager Marc Ott commented that this is “not the best practice.” He added that his statement was “just a friendly caution for us to be disciplined with respect to our financial policies.”

This didn’t sit well with Leffingwell, who protested the funding of additional items periodically.

“I’m going to vote against a lot of items today that I really like the idea of funding,” Leffingwell said, before voting against an amendment to allocate $112,241 from the general fund to support the Supplemental Nutrition Assistance Program, which passed in a 6-1 vote.

“It’s just the fact that this is going to result in a tax increase,” said Leffingwell. “Already we have a tax increase, and this will add to that.”

Council ultimately voted to adopt two amendments that staff offered to increase property tax revenues. One amendment is based on new figures from the certified tax roll, and the other is an update to reflect an improved tax collection forecast. They both passed in 6-1 votes, with Leffingwell dissenting.

Leffingwell proposed alternatives to each of these amendments and was the sole Council member to vote in favor of them. Together, these amendments would have reduced the property tax rate by 0.36 cents per $100 of taxable value, reducing the currently proposed rate of 48.09 cents to 47.73 cents.

Leffingwell’s office released a statement late Monday afternoon saying the amendments would have saved taxpayers approximately $4.5 million. “Affordability represents a key issue in Austin, and today’s votes undermine efforts to preserve it,” he said. “We should not be spending this new revenue on Council member projects, but instead we should help all Austinites by lowering the property tax rate.”

Council Member Laura Morrison objected to Leffingwell’s first alternate motion. “We have such critical needs,” she said. “I feel like we really need to balance the tax rate with being able to satisfy those needs.”

Some of the items that Council approved included full or partial funding for a new Emergency Medical Services demand unit, increased library hours, after-school programming for the Austin Independent School District and social service contracting.

Siler said that Council had increased enterprise fund spending by $787,057. She pointed out that, though the budgets of Austin Water Utility, Austin Energy and the Watershed Protection Department make up the majority of this category, the increases will not affect utility rates.

Council did not publicly discuss the potential purchase of 75.19 acres of property at Bull Creek Road and 45th Street, instead making plans to take the resolution up at today’s meeting. Leffingwell announced that they had discussed legal and real estate issues related to the resolution in yesterday’s executive session.

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