Austin Approves $4.2 Billion Budget, Meaning Higher Taxes And More Spending On Homelessness Services

Sep 10, 2019

The Austin City Council approved a record $4.2 billion budget Tuesday, directing more money toward services for people who are homeless and to hire more police officers.

Austin Mayor Steve Adler called the budget "responsible, innovative and focused on equitable solutions." In a statement he wrote that it "embodies the priorities and character of Austin, with investments in arts and music, affordability and mobility, public safety and making chronic homelessness a thing of the past."

The budget passed on a 10-1 vote, with Council Member Jimmy Flannigan the lone dissenter.

“We are not making good decisions for the long-term fiscal position of the city,” he said. “We can see charts that have deficits charted out three and four and five years, but we’ve done very little so far to adjust to that.”

City council passed a nearly 8% increase in tax revenue, going just up to the state-mandated line on annual increases. As a result, the owner of a home valued at the city’s median, or $353,265, will pay roughly $92 a year more in city property taxes.

At a preview of the budget in August, City Manager Spencer Cronk said the choice to collect more tax revenue is the city’s attempt to shore up funds in the face of a cap taking effect next year. The new state law will require any proposed tax revenue increase to be put to a vote if it exceeds 3.5%, as opposed to the current 8% limit.

“Do we propose a more modest increase in tax revenue this year as we did last year and forgo tens of millions of dollars of future revenue?” Cronk said. “Or do we go to the full rollback rate, thereby positioning the city to better contend with the financial problems ahead?”

Chief Deputy Financial Officer Ed Van Eenoo told council Tuesday that with the new cap, the city could face a budget shortfall of nearly $27 million in four years.

But the majority of council members chose the latter route – to collect the maximum tax revenue this year in anticipation of new state restrictions.

Austin’s budget for the coming fiscal year represents an increased spending of nearly 4% over the year before and includes $62.7 million for increased homelessness services.

In July, the city loosened restrictions on where can people can panhandle, camp and rest in public. These rules set off a conversation on homelessness and how the city should balance a need to transition people to housing and consider public health and safety.

The budget also reflects a decreased portion of spending on public safety over time; historically the city has tended to spend about 70% of the general fund budget on police, fire and EMS. This year, the city has earmarked 67%.

Despite this, council voted to fund 30 new sworn officers to the Austin Police Department.

Council also voted to include in the budget additional money to aid with wildfire mitigation, the 2020 Census and subsidized childcare services.