AUSTIN (KXAN) — A new proposal from the city of Austin would lower the largest part of your tax bill in exchange for an increase elsewhere.
If someone lives in Austin, 75 percent of their property tax bill goes to the Austin Independent School District, which in turn gives the majority of the district’s money back to the state under Texas school finance formulas. City staff presented an idea to city council members in a work session early Wednesday morning. The current proposal has the city entering into an interlocal agreement with AISD to “provide funding for services that serve a municipal purpose,” according to the council agenda.
The proposal calls for raising city property taxes to off set school taxes in AISD and six other districts that are in the city of Austin limits. It would work as a tax swap with AISD to reduce some of the funds recaptured by the state and given to less property rich school districts across Texas.
Mayor Steve Adler tells KXAN this “tax swap” could share the burden and lower the overall tax bills for people who live in Austin. Adler tells KXAN he would not support the measure unless it lowers taxes overall.
The Austin City Council voted to consider setting the proposed property tax rate at the maximum amount of 46.51 cents per $100 of taxable value, which is 2 cents higher than the rollback tax. The current effective tax rate is 41.07 cents. If approved, this would be an increase of 13.2 percent.
There will be two public meetings for citizens to weigh in on the rate increase.
Wednesday’s approval doesn’t necessarily require the adoption of a higher tax rate. It just “merely sets the ceiling” of what the city council can consider after adopting the city’s budget.
Council Member Ellen Troxclair was one of the four council members — Delia Garza, Ora Houston and Jimmy Flannigan — who voted against the proposed measure.
“It is so upsetting to me to know there [are] so many people in the city who are struggling with property taxes and affordability, and the city decides they can afford an 8 percent tax increase year after year. I was opposed to the 8 percent, and now we’re even exceeding that rate,” said Troxclair in a release. “It’s outrageous. I will be absolutely the first person to sign a petition for a rollback election, and I will lead the opposition in opposing a 14 percent tax increase.”
Approximately 25 percent of city of Austin residents live outside of the AISD boundary. In all three scenarios presented during the meeting, those homeowners would experience higher tax bills while the AISD homeowners would pay less.
The first public hearing is scheduled for 4 p.m. Aug. 17 and the second one is on Aug. 31. Both will be held during the regularly scheduled council meetings at city hall.
After the hearings, the council can adopt the tax rate proposed or a lower tax rate. The vote on the budget is scheduled for Sept. 11.
Editor’s Note: The headline and story have been changed throughout.