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A tax swap scenario for you

Thursday, August 17, 2017 by Elizabeth Pagano

Last week, City Council voted to preserve the option of participating in a “tax swap” with Austin Independent School District that would allow the city to give money to schools that would avoid recapture from the state. Yesterday, Deputy Financial Officer Ed Van Eenoo presented City Council with a variation on the plan that he dubbed “Council Discussion Scenario #1.” In this scenario, the city would contract with AISD for $10 million and with the other school districts within Austin’s borders for $7.4 million in services, increasing the senior homestead exemption by $9,000. That scenario would see the city increasing its tax rate by 1.6 cents above the rollback rate and AISD reducing theirs by 1.9 cents. Because of the nature of the plan, that would give AISD $4.6 million more in money not subject to recapture, saving AISD taxpayers about $8.33 in the process. The typical taxpayer not in AISD would pay $44.97 more, but, Van Eenoo explained, would see benefits that meet or exceed that amount. Seniors, which were a point of concern last week, would typically save $11.04, and would not be impacted overall with the increased exemption (though Van Eenoo did note that those seniors with the highest valued homes would see an increase in taxes). Of course, the city would have to commit to that exemption before the rollback election and, if voters didn’t approve the higher tax rate, it would result in a $1.5 million hole in the city’s budget. “My sense is it’s really complicated,” said Mayor Steve Adler. “I’m not sure we can effectively communicate it. But, in a time when we have tight budgets and we are trying to find money where we can, this could be a way, possibly that we could end up with a health clinic in Del Valle that we don’t otherwise get.” At the onset of the presentation, Van Eenoo assured/warned Council that his office was prepared to run through as many tax swap scenarios as Council would like.

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