Government
BY BEN THOMPSON
Austin leaders are weighing a $5.91 billion budget for the upcoming fiscal year 2024-25, potentially backed by a more than 5% increase in residents’ property taxes, utility charges and other fees. The FY 2024-25 budget will be finalized starting Aug. 16, and city leaders will spend the coming weeks reviewing the plan and proposing changes. In a nutshell City Manager T.C. Broadnax said his proposed FY 2024-25 budget addresses Austin’s critical needs, maintains city services, and invests toward commu- nity goals to make the city more livable, affordable, equitable, sustainable and resilient. He also said it prepares for “financial uncertainty” and multiple major infrastructure projects now in development. The plan will likely end up costing Austinites more with a proposed a tax rate of $0.4493 per $100 valuation. While that represents a less than 1% increase over the FY 2023-24 rate of $0.4458, it’d translate to about a $100 higher tax bill—nearly 6%—for the owner of a median-valued home, thanks to rising appraisals. The city’s general fund, covering most of the public-facing departments supported by tax reve- nue, would grow more than 4% for the upcoming fiscal year to about $1.41 billion. Services ranging from emergency response to parks, libraries and animal services are all in line for increases, largely driven by personnel costs. Some new spending would be supported as well, like an additional $3.6 million for rental assistance, and $2.6 million to staff a new West Austin EMS and fire station. Budget proposed with tax, fee hikes
Taxes and fees rising The city’s annual resident impact estimates are based on property taxes for a median-valued home and “typical” utility and service use.
Some extra money could be available if city offi- cials pull some money from the budget’s proposed reserves, a strategy that could yield more than $4 million. Austin’s employees are also in line for more pay and additional benefits. Civilian staff can expect a 4% raise this year, followed by 3% more next year to reach a targeted wage floor of $22 per hour. Sworn public safety staff are also in line for higher wages or one-time payments. Diving in deeper Broadnax and city financial staff said the budget came together at a tough time for financial planning across Texas. A significant amount of one-time federal dollars are drying up, and cities are limited in their ability to increase their tax revenues under new rules imposed by the state in 2019. “If you look at other Texas cities, you’re looking at budget deficits everywhere you look: Dallas, Houston, Corpus Christi, Fort Worth, San Anto- nio—they’re all struggling with budget deficits of various magnitude and looking to, ‘What are we going to have to cut in order to balance our bud- get?’” Chief Financial Officer Ed Van Eenoo said. Texas cities’ property tax collections can’t increase by more than 3.5% year over year unless an election is called to secure voter approval for a higher tax rate. Austin has only held one tax rate election since 2019—the 2020 vote to fund the Project Connect transit system—and officials aren’t considering one now. But looking ahead, they floated the possibility of asking for a larger tax hike in the near future. “We’re in a new time; we’re in a new world with those restrictions. But there are ways to do more, and how do we consider that to be financially sound and make sure we’re protecting our long- term financial structure?” Mayor Kirk Watson said.
Utility and service charges
Property taxes
$2,720.76 $4,468.04 $2,765.52 $4,495.68
$1,747.28
FY 2020-21
$1,730.16
FY 2021-22
$3,101.64 $4,781.16
$1,679.52
FY 2022-23
$3,304.08 $5,085.58
$1,781.50
FY 2023-24
$3,474.24 $5,358
$1,883.76
FY 2024-25*
*PROPOSED
General fund budgeting The general fund budget could grow about 4.5% next year. Most departments are supported by tax revenues.
FY 2023-24 (current)
Public safety Parks, libraries Public health, homelessness Municipal Court
Total: $1.35 billion
FY 2024-25 (proposed)
Total: $1.42 billion
Housing, Planning Animal Services
FY 2025-26 (planned)
Other
Total: $1.47 billion
SOURCE: CITY OF AUSTIN/COMMUNITY IMPACT
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