City finances look less dire as income rises
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.