Brutal budget season begins
Lean times at the city.
Twelve days ago, City Manager T.C. Broadnax submitted the proposed FY 2025 budget, much of which was presumably shaped by his predecessor, Jesus Garza.
Here's the key number:
This budget will raise more total property taxes than last year’s budget by $64,085,547 or 6.1%, and of that amount $24,866,992 is tax revenue to
be raised from new property added to the tax roll this year.
In other words, $39,218,555 will come via a property tax increase that, for the median homeowner (home value = $524k), will amount to an increase of $102 per year.
Because of state revenue limits, the city can only collect 3.5% more in taxes from the properties that it taxed the previous year. That means that new development is exempted from the limit, whether that is a new downtown skyscraper, a new single-family subdivision on the outskirts of town or a new ADU in someone's back yard.
The 3.5% cap, which replaced the 8% cap that existed for years before, has put the city on an untenable fiscal path. The inevitable fiscal crisis has been delayed thanks to the post-pandemic boom in sales tax revenue, which is the other critical component of the city budget. But sales tax revenue has since come back to Earth –– or even worse.
The city can go above the 3.5% property tax limit with voter approval, however, and Council will eventually have to resort to that in the coming years just to maintain current levels of service.
In the meantime, new development –– particularly new infill development –– is key to the city's ability to fund services. Council must keep in mind that opposing new development or trying to negotiate down the size of a new development is not only bad for housing, but it's bad for the budget and the many services it funds, from police to parks to homeless housing.
Tomorrow we'll delve into the budget implications for police, fire and EMS. Today we'll take a look at a couple of other policy arenas Council is confronting in the budget.
Council wakes up to the Austin Pets Alive! scam
At Council's first budget work session today, finance staff went through the budget for each city department alphabetically. First up was our beleaguered Animal Services Dept.
