The Austin City Council cut more than $95 million from its annual budget Thursday night. The changes come after voters earlier this month rejected a property tax rate hike known as Prop Q. Its passage would have generated an additional $110 million. The budget approved by the council in August included those additional dollars.
The cuts include reducing the number of new people the city will hire for park and ground maintenance, along with eliminating additional funding for rapid rehousing beds, homelessness diversion programs and efforts to help people get jobs. The city also had to cut additional dollars that would have gone to emergency rental assistance and additional needs for EMS.
Council Member Mike Siegel said the priorities the city is trying to protect are at the heart of what the city should do for its residents.
“We want to strengthen emergency response, we want to improve our parks maintenance, we want to take care of our city employees and we want to improve wildfire mitigation without cutting so deeply into the homeless strategy office and other essential programs,” he said.
The city was still able to pay for immediate needs, like emergency medical services, shelter for people experiencing homelessness and mental health response. The council also moved more than $14 million from its reserve fund to balance the budget.
Money was also set aside for wildfire mitigation, to address food insecurity for children at Title 1 schools and elderly residents and to support child advocacy services in Williamson County.
Even with the cuts, the council was able to include $3 million for EMS overtime to improve response times, $2 million to expand the mobile crisis team to help people with mental health struggles and $3.1 million for shelter space and permanent supportive housing programs for people experiencing homelessness.
Kerri Lang, the city’s budget officer, said that to meet the council's priorities, it meant making reductions in several areas.
“With limited dollars that we have, and understanding that we wanted to make sure that we balanced and kept as much of the priorities in place, we looked at how we could address those specific priorities without completely removing all the other things, ” Lang said Thursday.
The push for more cuts
In the days leading up to Thursday's vote, dozens of residents criticized the council’s spending and the request to increase property taxes. They said instead of making cuts to critical city services, the city should stop spending money on things like the Austin Convention Center redevelopment, the "Cap and Stitch" project over I-35. They also said the city should reopen the Austin police labor contract, which eats up a large portion of the budget.
“Asking our already struggling communities to make up the supposed difference while squandering $104 million on the cap and stitch project, $1 million on a logo and $1.6 billion on a outmoded convention center was unjustifiable and tone death,” resident Marian Sanchez said during public comment this week. “We are all being forced to live within our means and it's time the city does too.”
Lang said money for the convention center project comes from hotel occupancy taxes, which can only be used to promote tourism in Austin. That does not come from nor can it be redirected to the city’s general fund. She said the Cap and Stitch project will be paid for through a long-term loan that does not need voter approval. That money also cannot be used for general operations.
The council does have the option to revisit the contract it signed with the city's police union last year – a five-year, $218 million agreement that gave across-the-board raises to officers. That deal had a clause that allowed council members to limit some police funding if voters failed to pass a tax-rate increase. But after Prop Q's failure, city staff said that wouldn't be necessary.
Tough decisions ahead
City Manager T.C. Broadnax said as the city continues to face challenges to property tax revenues and federal funding, the council will have to be pickier about what programs it can fund.
“We just need to be more responsible overall and level-setting with people about what we are not going to be able to do and whose shoes we are not going to be able to step into because we just can’t afford it because it's not sustainable,” he said.
He said the city should be focusing on economic development because that helps add to the tax base.
The new tax rate is 52.4017 cents per $100 of taxable value. The average homeowner with a house valued at about $495,000 would pay an additional $105 on their tax bill next year. That does not include the property tax rate increases from Travis County, Austin Public Health and Austin Community College.
