Council's final approval of the budget begins Aug. 16. Between now and then are several more public hearings and workshops about the contents of interim City Manager Jesús Garza's proposed fiscal year 2023-24 spending plan, which can be viewed here.
Meeting highlights
As he laid out in his written budget message, Garza said the draft budget was compiled to:
- Get city government services back to basics
- Move "generational" infrastructure projects like the Project Connect rail system and the airport expansion forward
- Advance many stated priorities of council members
Among those priorities are a focus on public safety staffing, upgrading city parks and library facilities, shoring up civic resiliency efforts, and responding to local affordability concerns.
Council Member Vanessa Fuentes said she supports the budget's resilience investments, such as $6.1 million to equip more city facilities with generators, $1 million for a study of burying Austin Energy's overhead power lines and $385,000 to implement proposals from Austin's Climate Equity Plan.
"I wanted to highlight that as another positive step forward because we know that with climate change we’re seeing we’re going to have more disasters in our city, more extreme weather events," Fuentes said.
Staff and council members also pointed out the potential changes to city pay, such as across-the-board 4% raises for government employees and various retention incentives.
Officials said the updates are noteworthy both in comparison to other cities, and as Austin planners work to address consistently high vacancy rates across all departments—which fell from 17.6% to 14.4% since the new $20 per hour minimum wage went into effect. That floor is expected to gradually ramp up to $22 per hour by late 2025.
"In terms of the way that we’re treating our city employees and hopefully the impacts that it will have on recruitment and retention, I just wanted to give y’all props. I think those are really strong efforts, and they’re greatly appreciated," Council Member Chito Vela told the finance team.
Garza also took time to respond to questions about the budget's consolidation of quality-of-life offices focused on traditionally underrepresented communities, a change from their previously standalone work. The move drew several local organizations to protest at City Hall on July 18 due to concerns about transparency and the offices' independence, but Garza said the change will not reduce the civic focus on their work.
“The bringing together of the Equity Office, the Civil Rights Office and the department of small/minority business affairs is to bring some kind of mass to that effort all in the same vein of trying to open doors where doors have been closed in the past, responding to complaints where people have been discriminated against either because of their races, creed or faith," Garza said. "When we talk about equity, it’s how can we preach the gospel of being open as a community to all people and not see them through any specific lens."
Budget calculations explained
Beyond the upcoming fiscal year, staff also shared some perspective on Austin's budgeting approach and what the city may face through the 2020s as economic conditions change.
Budget planners said they don't expect any immediate impacts on city revenue collections as a result of the property tax legislation approved by state lawmakers this summer. However, the state-imposed 3.5% cap on year-over-year property tax revenue growth remains a factor limiting Austin's collections even as the local property tax base is rapidly expanding.
“It is prudent for us to make sure that as we are trying to capture that base increase, that we are setting ourselves up as a city to be fiscally sound in the out years. And with that cap, it’s hard to do that if we don’t go to the 3.5%," Lang said in an interview following the council session. "It puts us in a situation where it builds bigger deficits in the out years."
Nelson agreed, saying that state lawmakers essentially incentivized cities to hit the maximum increase every year to avoid losing out on tax base growth.
Nelson also said many key items addressed in the budget are proposed as one-time, rather than recurring, spending in an effort to roll out improvements while saving money long-term.
"It’s repairing our facilities or doing other capital-type needs, and it’s saving taxpayers money in the medium term because we’re not issuing debt—which drives up the cost that they would be paying for on an uncapped part of the tax rate in a later year," he said.
In a similar vein, the budget would also increase Austin's reserves from 14% to 17% of the general fund in case of unexpected downturns or emergencies, a plan council seemed generally supportive of. The move would get reserves to $225.5 million next year—about 10% more than in this year's plan.
“We had a favorable audit report come out about it, and just as a financial services guy I think that would be important for us to get done," Nelson said.
