Austin city guides approved a new budget that will increase police spending and allocate dollars to public transportation and housing development.
All in all, city council members had a budget of $ 4.5 billion on Thursday evening, up 7 percent from the current budget. The city’s fiscal year begins on October 1st.
“We unanimously approved a budget today that will fight the pandemic (and increase our investments in public safety),” said councilor Greg Casar, who represents parts of North Austin, after the vote. “I really appreciate everything my colleagues have put forward and how we came together on this important budget.”
Five council members attended the meeting remotely, while the other six met in the town hall rooms.
Here’s a snippet of how the money is being allocated: $ 6.2 million to train new police officers, $ 2.4 million to fund 18 positions for an office that runs the local public transport initiative Austin oversees, and $ 2.3 million in subsidies for affordable housing projects.
Council members also approved a 2 percent increase for the city’s employees, with a one-time grant of up to $ 1,000, depending on the employee’s current salary and hours.
While budget officials were at times worried about deficits from the effects of the pandemic, City Director Spencer Cronk presented a much more optimistic picture of the city’s financial situation when presenting a draft budget last month. This is partly due to the city’s sales tax revenue, which he believes was higher than originally expected.
“Economically, Austin, Texas has mastered the many challenges of the past year as well or better than any other major city in America,” said Cronk in July. “Our local economy is fundamentally strong and has performed unexpectedly well during the Covid pandemic, with more positive effects on our budget than we expected a few months ago.”
But as council members prepared their final budget approval this week, they had to grapple with the realities of a state law passed in 2019 that lowered the level of new property taxes cities can levy each year. If cities want to exceed the 3.5 percent limit, they have to get the voters.
Austin Households Bureau officials have warned that the city could not fund millions of basic city services in the years to come unless it holds elections to raise more property taxes.
“We’re just trying to keep the lights on, we have deficits,” said Ed Van Eenoo, Austin CFO. “I would expect tax rate elections in our future.”
This year, however, is a little different. Because of the winter storm in February, the governor temporarily suspended the obligation to hold elections before more property taxes are collected than the state normally allows.
The councilors took advantage of this and voted to increase the city’s total property tax revenue by 4.7 percent.
Councilor Mackenzie Kelly, who represents the far northwest corner of Austin, was reluctant to go that high.
“I voted for the budget today with mixed feelings,” she said. “I was concerned about the tax burden we were putting on residents at a time when so many were facing Covid-19 and other economic challenges.”
While Austin’s property tax coffers will be fuller than in previous years, the city estimates the impact on private property tax bills to be small.
City officials estimate that the owner of a $ 400,000 home will save about $ 17 in annual property tax. The actual savings, however, depend on how the value of a property has developed over the past year and has probably increased significantly; The average home sales price in Austin has increased $ 100,000 since the start of the year.
These projections take into account a 20 percent homestead vacation that councilors approved earlier this year.
Most of the city’s $ 1.2 billion general fund – think of it like the city’s checking account – is spent on public safety, including police, fire, and ambulance services. The police budget is the largest of the three at just over $ 442 million.
This means a significant increase in the budget last year as the city reacts to a new state law that penalizes a city financially if it cuts resources for the police. Governor Greg Abbott made the passage of such a bill a priority after members of Austin City Council cut about $ 130 million by the police department last year in response to calls from citizens to invest in police money in other services such as housing and health care had.
Most of the money didn’t go into something new; it was spent on several departments that came under the police force, including the forensic science lab and the 911 call center. If Austin recovers police funding, these departments will return to the police department.
This story was produced as part of Austin Monitor’s reporting partnership with KUT.
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