Austin City Council fights against proposed 2.5 percent property tax revenue cap

Austin Mayor Pro-Tem Delia Garza along with Mayor Steve Adler and several councilmembers held a press conference at City Hall on Thursday about the State Legislature's proposed 2.5 percent cap on the amount of property tax revenue cities can collect each year.

The cap is part of House Bill 2 and Senate Bill 2, both of which would require a public vote for property tax increases over that cap.

"Just so its proponents can say that they offered property tax relief," Garza said. "That cap, 2.5 percent, does not provide real property tax relief."

Garza says the relief will come when the state fixes the "broken" school finance system.

"HB2, if it does not change, cannot be considered anything else other than a direct attack on cities," said Adler.

The Austin City Council unanimously passed a resolution Thursday morning calling the proposed cap an "impending crisis." The resolution says a 2.5 percent cap would only save the average homeowner less than $5 per month on City of Austin property taxes.

They say in turn, Austin will face a $51.7 million deficit in three years that could hurt their ability to fund essential services like public safety when it goes into effect.

"It will be an extremely tough budget," Garza said. "I can't imagine a situation where we're not laying off city employees and possibly closing libraries and closing pools which we already hear from our constituents when we do close pools how that does not make them happy."

"Austin is one of the few cities that actually is increasing taxes nearly 8 percent every year," former city councilmember Ellen Troxclair said. 

Troxclair was often the lone dissenting voice on the City Council. Now she's a Senior Fellow with the Texas Public Policy Foundation and has been advocating for these bills at the Capitol over the last several months.

"At the current 8 percent rate, property taxes are on track to double every nine years and this bill would slow that rate of growth so that people aren't seeing their property taxes double but every 29 years," Troxclair said.

Troxclair believes the city's spending habits are outpacing people's ability to pay.

"Who do you know that has gotten an 8 percent pay raise every single year for the past 10 to 20 years?  No one!  And yet that is what the city council is expecting you to hand over," she said.  

Troxclair says if Austin wants to exceed the 2.5 percent rate they can. It will just trigger an election so they'll have to go to the voters.

Troxclair also addressed the council's fears of having to cut public safety.

"They always like to point to basic city services like our police or our parks when there's any conversation about making government more responsible and accountable," Troxclair said. "But the reality is they're going to have more money next year and the year after that than they do this year.  This is not a cut, this is a slowing of the rate of growth over time."

The HB 2 discussion at the Capitol has been postponed until Monday. Adler is hoping lawmakers will decide to exempt public safety from the revenue cap.