City fi­nances look less dire as in­come rises

Austin American-Statesman - - METRO & STATE - By Sarah Cop­pola

The City of Austin’s fi­nan­cial out­look seems to be slightly less dire than ex­pected as bud­get of­fi­cials pre­pare to present a 2010-11 bud­get next week.

More sales tax rev­enue — a key part of the bud­get — has been rolling in than bud­get staffers an­tic­i­pated.

An­other sliver of good news: Prop­erty val­ues fi­nal­ized this week by the Travis Cen­tral Ap­praisal District dropped slightly less than pre­dicted since last year. Those val­ues partly de­ter­mine how much prop­erty tax money the city can col­lect.

Bud­get of­fi­cials said in April that the city faced an $11 mil­lion to $28 mil­lion short­fall for the 2010-11 bud­get, which takes ef­fect Oct. 1, be­cause of lags in prop­erty tax and sales tax rev­enue, which to­gether make up the bulk of the op­er­at­ing money that pays for most city ser­vices, such as parks, li­braries and po­lice.

Bud­get of­fi­cials last month out­lined sev­eral pos­si­ble cuts, in­clud­ing li­brary hours, po­lice over­time and the Trail of Lights. They would

not pro­vide up­dated rev­enue es­ti­mates this week or de­tail the ser­vices they plan to cut or add, say­ing they would make all of that pub­lic Wed­nes­day, when they present a pro­posed bud­get to the City Coun­cil.

The city will hold pub­lic hear­ings on the pro­posal next month be­fore the coun­cil ap­proves a bud­get mid-Septem­ber.

City Bud­get Of­fi­cer Ed Van Eenoo said that over the past eight months, the city has col­lected 3.7 per­cent more in sales taxes com­pared with last year. That is a much stronger show­ing than the 4 per­cent drop that bud­get staffers had ex­pected.

Not­ing the up­ward trend, bud­get of­fi­cials now pre­dict a big­ger in­crease in sales tax rev­enue next year than the 2.5 per­cent in­crease they fore­cast this spring, Van Eenoo said.

Based on spring es­ti­mates from the Travis ap­praisal district, the city had ex­pected a 5 per­cent drop in prop­erty val­ues for the 2010-11 bud­get.

Now that a ma­jor­ity of prop­erty ap­praisals are no longer un­der protest, the ap­praisal district has de­ter­mined that the to­tal tax­able prop­erty value in Austin fell 3.8 per­cent, Chief Ap­praiser Pa­trick Brown said.

That’s good news, but the amount of prop­erty taxes the city col­lects will still de­pend on the tax rate the City Coun­cil chooses.

The bud­get fore­casts for the city’s util­ity de­part­ments have not changed much since April, Van Eenoo said.

Those de­part­ments run on money that Austin cus­tomers pay for ser­vices such as elec­tric­ity, wa­ter and trash pickup. The de­part­ments also help pay for ba­sic city ser­vices, like parks and po­lice.

Austin En­ergy and Austin Wa­ter Util­ity are fac­ing short­falls of $83 mil­lion and $8.6 mil­lion, re­spec­tively, Van Eenoo said.

The fore­casts of Austin’s bud­get staffers tend to be fairly con­ser­va­tive; they ex­pect the worst ini­tially, then of­ten are able to present a cheerier pic­ture by late July, when bud­get sea­son kicks into high gear.

A few weeks af­ter city of­fi­cials pro­posed the 2009-10 bud­get last sum­mer, they an­nounced that Austin had $1.6 mil­lion more to work with than an­tic­i­pated, partly be­cause Austin En­ergy cus­tomers were us­ing more elec­tric­ity than ex­pected — and pay­ing higher bills — dur­ing a scorch­ing sum­mer.

Bud­get staffers used the ex­tra money to lower the prop­erty tax rate they’d sug­gested, scrap a few pro­posed fee in­creases and pay long­time work­ers their an­nual “longevity pay,” which had been on the chop­ping block.

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