As Austin faces a $33 million budget shortfall, the City Council is weighing whether to put a property tax increase on the ballot this fall.
Austin City Council members met Tuesday to discuss whether they should ask voters to approve a tax increase above 3.5% to fund essential services in the budget.
State laws prevent cities and counties from raising taxes over 3.5% in a given year, but a public vote could allow the city to raise taxes as much as 8 cents on every $100 of taxable value on a home, about $476 a year for an average Austin homeowner.
Discussions began at an Audit and Finance Committee hearing, but Mayor Kirk Watson said it's not a foregone conclusion.
"There's been no decision made yet," he said. "Don't jump to conclusions on that, because if we're gonna make a decision on all that ... we want to make assure that there's rigor.”
Like last year, Austin is facing some challenges this budget cycle. The city has seen a slump in sales tax revenue and federal pandemic-recovery grants have run dry.
City Manager T.C. Broadnax laid out a $6.3 billion proposed budget that includes a 3.5% property tax increase. That budget also includes cuts to overtime for police and a reduction in fire crew capacity on some fire trucks. Those departments, along with EMS, account for roughly two-thirds of the city’s general revenue fund, which pays for everything from police to public pools to rent-assistance programs.
Travis County and Austin ISD have held similar elections in recent years to fund services, and the city previously held a tax rate election for Project Connect, the multibillion-dollar transit project.
The full City Council will meet Wednesday to discuss the budget — and the possibility of a tax rate election. It'll also meet next week to get a final appraisal of a tax rate election's impact on taxpayers before making a decision.
