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Council sets stage for last-minute homestead exemption debate

Tuesday, June 28, 2016 by Caleb Pritchard

City Council has scheduled one final meeting this month in order to take another crack at fulfilling a key campaign promise many members made during the 2014 elections.

Wednesday afternoon’s special called session will feature the third-reading vote on a measure to increase the homestead exemption to 8 percent.

Last Thursday evening, Council voted 6-5 to raise the current 6 percent exemption another 2 percentage points. Mayor Pro Tem Kathie Tovo and Council members Greg Casar, Pio Renteria, Delia Garza and Ora Houston voted against the proposal, which is estimated to blow a $3.8 million chunk out of the city’s General Fund. City staff projects that the owner of a $250,000 home would stand to save $22.95 on her annual tax bill.

The bare majority of the vote was not enough to pass the measure on second reading, which would have required two additional meetings this week. However, just after 2 a.m. on Friday, Mayor Steve Adler announced that Casar had volunteered to change his vote. Casar insisted he was merely doing it as a matter of “courtesy.”

“I was told if I wanted to be courteous or a statesman, I should not run for City Council,” Casar quipped. “I will vote for it on first and second reading and won’t come back. I won’t be here for your third reading because I’ll be against it.”

Adler and several other Council members pledged during the 2014 campaign to address the rising cost of living by delivering a 20 percent exemption to homeowners. After protracted discussions last year, Council took a step in that direction by approving the 6 percent rate.

On Thursday night, Council Member Ellen Troxclair pleaded with her colleagues to “continue moving that ball forward” before moving for the adoption of the full 20 percent.

“I know that there is no perfect magic tool out there,” Troxclair said. “There’s no magic wand that each of us can wave and make Austin affordable, but we’re each doing our own part in our own way to try to address the inadequacies or to combat the rising cost of living in our different ways, whether through affordable housing or homestead exemption or through rental assistance programs.”

When Garza asked for a cost estimate of Troxclair’s proposal, Deputy Chief Financial Officer Ed Van Eenoo explained that it would be close to $23 million after accounting for a $2 million budget surplus projected in April.

Garza conjectured that that large price tag would lead to cuts in city services and personnel before stating unequivocally her opposition.

“Families who are lowest-income families get minimal, minimal benefit from this, and it gives the most benefit to the wealthiest in our community,” said Garza. “I will not support any additional increase to the homestead exemption. In fact, I wish we could go back to zero percent.”

Tovo concurred with Garza and also raised her concern about how the item had been scheduled. Instead of being on the regular agenda, the item was set for a special called session that Adler gaveled in after recessing the regular meeting.

“I don’t recall a time in any recent memory, either as a Council member or as a community member, where there was an item that was not posted on the full Council agenda or on the addendum, and this is just most unusual to have an item that was posted on a special called meeting within another Council meeting,” Tovo said. “It made it so we couldn’t have a discussion at the work session, and it makes it very difficult for the public to know that this conversation is even taking place today.”

Adler explained that he had arranged for the special session in order to get the item before Council ahead of the July vacation and the budget process that begins in earnest in August.

The vote on Troxclair’s proposal to raise the rate to 20 percent failed, with only Council members Don Zimmerman and Sheri Gallo joining her to support it. Following that vote, Gallo offered to increase the exemption by 4 percent, bringing the new total to 10 percent. That effort also failed, with the same three members as the lone supporters and Houston abstaining.

Troxclair then moved to raise the homestead exemption from 6 percent to 8 percent, a motion that was seconded by Council Member Ann Kitchen, who explained, “I hear from folks in my district about the importance of a homestead exemption. I have many folks that are on fixed incomes, retired, they’re getting older. This does make a difference to them. So, while I couldn’t vote for the higher amounts this year due to the impact on cuts, I think that 2 percent would be close enough that we could work with that.”

Kitchen said she remains committed to working toward the full 20 percent exemption in the future.

After the 6-5 vote, Adler’s decision to simply recess the special session in order to resume the regular session caused friction on the dais. Kitchen and Gallo both questioned why he wouldn’t simply adjourn the special meeting, and Zimmerman moved to vote to adjourn, an effort that failed amid the confusion. Kitchen asked Adler three times if he planned on taking up the homestead exemption item later in the evening, to which Adler replied three times that he was unsure.

“I was recessing because I wanted a chance to talk to the city attorney,” Adler explained, saying that he was simply buying time to plot the next move. “It passed on six votes. Six votes doesn’t let it pass on three readings, so we can have two called meetings next week in order to be able to pass the item. We’re not there yet, and I don’t really know what to do about that yet.”

Photo by Images Money made available through a Creative Commons license.

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