The $4.5 billion budget was adopted in a unanimous 11-0 vote Aug. 12 after council spent two full days considering public testimony, staff feedback and their own priorities. The plan includes $1.2 billion in general fund spending centered on public safety and community items mostly in line with City Manager Spencer Cronk's original framework proposed in July.
Council also voted 10-1 to approve a property tax rate of $0.541 per $100 property valuation. The figure is a 1.41% increase over the current year rate of $0.5335 and one the city estimates will net the typical city homeowner a $17.12 reduction in their next tax bill as compared to this year's. Combined with other rate and fee increases, the city said the typical ratepayer will see a 0.6%, or $28.12 annual, increase in payment. District 6 Council Member Mackenzie Kelly voted against the tax rate.
“Council’s actions today provide a path forward to build on Austin’s many strengths while addressing the challenges we face as a city,” Cronk said in a statement. “This budget covers the increase in our base expenses, delivers our programs and services, and many of the critical reforms that our citizens want and that council has prioritized with minimal year-over-year impact on the typical Austin ratepayer.”
The approved fiscal year 2021-22 tax rate also represents a 4.7% increase above Austin's no-new-revenue rate, a level that would bring Austin the same revenue from the same properties as last year. That increase under state law is typically capped at 3.5% before requiring voter approval, but officials this year could work with increases up to 8% given recent disaster declarations.
With projected budget shortfalls at the 3.5% limit projected in the years ahead, city Chief Financial Officer Ed Van Eenoo has said tax rate elections will be likely over the coming years.
While spending on the Austin Police Department took center stage in last year's budget talks, council this year was less flexible in its ability to reduce or even maintain APD's FY 2020-21 spending level given the recent passage of House Bill 1900. That state law would punish large cities determined to be "defunding" entities, or those whose new police budgets fall below the levels of either of the past two years, with penalties related to annexation and city funds. Spending on APD has swung from $432.26 million in fiscal year 2019-20 to an estimated $305.82 million in fiscal year 2020-21, to the approximately $442.81 million approved Aug. 12 for the upcoming fiscal year.
The reallocation from last year's cuts would send offices including the city forensics lab and 911 call center back under APD's scope—a move city staff and council members have said they plan to work to again reverse in the future per HB 1900 waiver provisions—while providing funding for other items including additional APD cadet academy classes and Reimagining Public Safety Task Force recommendations.
Residents still turned out during this year's budget cycle in opposition to the $10 million bump for APD between the FY 2019-20 and 2021-22 plans. But as officials worked through budget talks this week, the focus mainly shifted to a slate of council priorities adjusting Cronk's proposed plan, and the level to which the city should increase its tax rate to provide for those asks and city reserves in the face of likely budget shortfalls in the future.
Among the council asks approved Aug. 12 was a District 4 Council Member Greg Casar-backed framework for one-time $500 stipend increases to city employees making less than $90,000. The proposal was estimated at $4.54 million and exempts council.
Other budget adjustments on the theme of resiliency and community programs included more than $1 million directed by District 7 Council Member Leslie Pool to after-school child care; $1.5 million directed by District 10 Council Member Alison Alter to Austin Fire Department and EMS improvements; and other measures related to displacement, food access and cultural arts support.
An $888,000 directive from Mayor Steve Adler will also see city staff work to expand a local pilot program for guaranteed income.
“We unanimously passed a budget today that tackles the pandemic, increases our public safety programs, and invests in our parks and affordable child care, all while giving the average homeowner a tax break,” Casar said in a statement. “I’m proud of our work to keep Austinites in their homes, our investments to improve emergency response, and our continued commitment to police reform—regardless of the governor’s continued interference in Austin’s governance."
The topic of policing rose up again during budget rider discussions in relation to the APD cadet academy process, which council voted to restart this spring after a year-plus hiatus due to investigations and re-evaluations of training. A measure from District 5 Council Member Ann Kitchen approved Aug. 12 provides for continued review of APD's ongoing 144th cadet class and prevents a budgeted 145th class from beginning until after that feedback has been incorporated into academy planning.
A separate measure from Kelly allowing for a modified APD cadet academy in addition to the two budgeted classes was also approved Aug. 12. Interim Police Chief Joseph Chacon said the modified class, if APD has funding available, would bring a smaller cohort of experienced law enforcement officers to Austin from elsewhere in Texas or the U.S. for a reduced four-month training period.
Kelly said she forwarded the proposal as an additional option for APD to more quickly bolster its force, which Chacon said now sits below 1,650 officers—well below the department's budgeted 1,809 officer positions.
“We still have vacancies, and we still have attrition that's very high, and so where this budget rider does not have a cost to the city, it provides the opportunity for our police department to be able to provide an alternative if they have the cost available to do so," Kelly said. "It would provide the ability to have officers who have experience on our streets, officers who can come in and help with the culture of the department.”
The budget process also included planning for the distribution of nearly $250 million in federal American Rescue Plan Act money the city is set to receive as of next year, around $245 million of which was allocated this spring. Council's spending framework for ARPA dollars includes more than $106 million dedicated to homelessness, some of which is potentially contingent on other local contributions to homeless strategy.
The city's ARPA homeless spending also includes at least $6 million for the second phase of Austin's Housing-Focused Encampment Assistance Link, or HEAL, program that has this year cleared out several priority public encampments and connected dozens of people with shelter and resources. Additional asks linked to ARPA dollars Aug. 12 included District 9 Council Member Kathie Tovo's amendments providing more than $300,000 each for Downtown Austin Community Court case manager staffing and Integral Care homeless health care work as well as nearly $290,000 for Homelessness Outreach Street Team, or HOST, mental health workers. Kelly's $86,000 amendment funding a full-time public health staffer to work with people experiencing homelessness and their pets was also included.
In addition to homelessness, council this year had directed $42 million in ARPA money to emergency rental assistance and more than $90 million to workforce and child care programs, COVID-19 response, arts and culture support, and other resilience-related directives.
The city said it plans to release its finalized budget document, including council adjustments made Aug. 11-12, in the coming weeks.