Tax swap off the table as Austin City Council works on finalizing budget

FILE - Classroom (KXAN File Photo)
FILE - Classroom (KXAN File Photo)

AUSTIN (KXAN) —  Austin’s budget deadline approaches. The discussion is not sexy, but substantive, reaching every aspect of life in the capital city. Most of the $1 billion general fund is already earmarked. Now council members are haggling over just $5 million left to their discretion.

“There are some extremely significant needs that aren’t included in the city manager’s proposed budget,” Mayor Pro Tem Kathie Tovo told KXAN, saying the funding city council is left with is incredibly limited. “You see some recurring themes. A real interest in trying to identify addition resources for those who are experiencing homelessness. You know, in my opinion, this is really one of the pressing issues.”

Another one, helping children through parent support specialists and after school programs at more than a dozen schools.

“Those are really important programs that will frankly close, if we cannot identify money in this year’s budget to continue our support of them,” Tovo said.

Several council member requests also ask for more maintenance funding for Parks and Recreation, including accessibility improvements.

“It’s like playing musical chairs, the music stops and you have too many good ideas for the money that’s available,” Mayor Steve Adler said. “Helping our school children and parents with after school, after day care, workforce development is important to me. Fixing our permitting department is important to me. Things associated with housing and affordability.”

But if you ask Council Member Ellen Troxclair, the focus should be on property tax relief.

“With this proposed budget, every taxpayer is going to see an 8 percent increase in their property taxes this year, which is on top of the 8 percent from the year before and the 8 percent from the year before that. And so property taxes at this rate will double in 9 years and that is just not sustainable for the taxpayers of Austin,” Troxclair said, adding, “We already have huge amounts of revenue, over $50 million coming in from new development, new fees, new sales tax, but instead of letting growth pay for itself, the city is continuing to turn back to taxpayers.”

There’s also still a lot of discussion surrounding the city’s hotel occupancy tax. Council is looking at how to redirect $8 million, of the $90 million tax, for historic preservation in the budget. Later this month, council members will consider increasing the tax 2 percent to help fund a convention center expansion, paving the way for the mayor’s so-called “downtown puzzle” to help pay for housing about a quarter of Austin’s homeless population.

As for the tax swap Adler proposed, that’s not going to happen. At least not this year.

The city would have to increase property taxes to pay for Austin ISD programs. In return, the district would have lowered its tax rate and prevented millions from being “recaptured” by the state. Property owners in AISD’s tax district would have saved about $30 a year but about 25 percent of homeowners who live in city limits but outside of AISD, would have paid more in taxes.

City council is scheduled to approve a budget on Wednesday.

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