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Council confronts tough budgeting decisions

Thursday, September 1, 2016 by Jack Craver

City Council members were faced with the grim reality Wednesday that the city’s financial situation is going to force some tough spending choices in the coming years.

A budget overview presented by the city finance department projected the city would face a $1 million shortfall during Fiscal Year 2017-2018. That might not sound bad, but as Deputy Chief Financial Officer Ed Van Eenoo pointed out, that figure does not account for a number of major initiatives that Council expects to be implemented in the near future. Those include a community-based policing program, five new fire stations, increased funding for grants to nonprofit service providers, the consolidation of Emergency Services District 4 and further increases to the homestead exemption.

“That’s a really scary forecast,” said Council Member Delia Garza, who noted that the situation could become worse if the state Legislature imposes further restrictions on the ability of municipalities to raise taxes.

Garza argued that this budget cycle should be the one in which Council makes “tough choices” about spending, and she said she would be asking every department that had requested a staff increase to explain what would happen if Council approved 25 percent, 50 percent or 100 percent less than the requested increase in full-time employees. Declining to hire additional employees now, she said, would be preferable to laying off city workers in future years.

Mayor Steve Adler urged staff to begin working with Council on budget-planning earlier in the year and suggested a number of potential cuts that he would like to explore. He suggested the city could scale back the planned implementation of a 42-hour work week for emergency medical service employees, which will require the hiring of an additional 53 EMS workers. He similarly floated putting a “pause” on Austin’s takeover of the Shady Hollow fire station, which is currently run by a separate emergency services district, and suggested the city could stop providing $1.5 million to help set up South by Southwest.

Council’s liberal majority was eager to lay much of the blame on the Republican-controlled state Legislature. Not only has the state put strict limits on the ability of local governments to raise revenue, but the “Robin Hood” education formula allows the state to redistribute a big chunk of property tax revenue raised by the Austin Independent School District and other school districts with high property values to those with lower property ones.

In the upcoming year, AISD will transfer more than $400 million of its revenue to the state, an increase of roughly $134 million over the previous year, a challenge for the district that has many on Council scrambling for ways the city can deliver services to Austin children that the school district would typically handle.

“If there’s an outrage, that’s where the outrage should be,” said Council Member Pio Renteria. “That the state is taking all our money. It’s hurting us, especially the minority community. It’s a big injustice going on in Texas.”

Council Member Greg Casar voiced an interest in finding ways to make commuters from wealthy suburban communities surrounding Austin pay for the city roads and other public services they benefit from on a daily basis. Recognizing that his remarks had raised the eyebrows of his suburban colleague, Council Member Ellen Troxclair, Casar assured her, “I don’t mean your constituents, who do pay property taxes. I’m talking about folks out in West Lake Hills.”

Troxclair, for her part, said she was delighted to hear those outside of Council’s conservative trio – consisting of her and Council members Don Zimmerman and Sheri Gallo – express an interest in cutting spending. The former Republican legislative aide also defended state caps on municipal taxing, saying Austin had to learn to live within its means.

Van Eenoo reminded Council, however, that it could choose to go above that rate; however, it would run the risk of triggering a referendum by citizens to overturn the increase.

Photo by Elembis (own work) [public domain], via Wikimedia Commons.

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