Austin taxpayers will face an increase in their property taxes next year, but not so much that their approval would be required.

Taxpayers must pay $0.4776 per $100 of taxable value, with a property tax exemption of $154,000 for homeowners age 65 and older. Child care facilities are also exempt from city property taxes. According to a city press release, “The average Austin homeowner will see an increase in the city portion of their annual property tax bill of $15.67 per month, or $188.02 per year. City fees and charges, including for electricity, garbage collection, water, sewer, and public transit user fees, will increase in response to rising operating costs as well as increasing service demands of a growing population. The increase for the average Austin taxpayer and fee payer is $30.16 per month, or $361.92 per year.”

State law prohibits the city from raising property taxes by more than 3.5 percent per year. This budget hit that mark. Both the Travis County Commissioners Court and the Austin ISD Board of Trustees have scheduled tax-level elections to meet their needs. Some, but not many, of those who spoke before the City Council on Wednesday said they wished they could vote for a tax increase. Most simply offered their advice on how the city’s tax dollars should be spent. Some asked the council not to raise taxes at all.

Although the majority of council members proposed changes to fund new items or improve existing programs, the budget was largely in line with proposals from the city’s finance department. The only issue council members disagreed on was how much the city should keep in its reserve fund for a rainy day. Council member Ryan Alter proposed lowering the city’s reserve amount to 16.7 percent, or about $4 million in a $5.9 billion budget. Policy calls for keeping that reserve at 17 percent.

After approving the base budget, Alter proposed adding a number of programs that will cost the city $4 million. These include a firefighter cadet class at a cost of $875,000; a $1 million increase in homeless prevention funding; another $300,000 for homeless families; $400,000 for logistical support for women seeking abortions sponsored by Council Member Vanessa Fuentes; funding for José Velásquez’s proposal for continuing substance abuse care at $140,000; and nearly $200,000 for contract adjustments in the early childhood social services area, as proposed by Fuentes. Alter also proposed expanding the mobile crisis response team to 24/7 at a cost of $1.46 million and $105,000 for an emergency services communications specialist, as proposed by Velásquez.

Mayor Leslie Pool attempted to separate the reservation issue from these amendments, but Alter said the motion was not appropriate under Robert’s Rules of Order. Mayor Kirk Watson ruled in his favor. Council member Alison Alter then made a motion to separate the issue, but Fuentes asked if they should vote on separating the issue.

There were only four votes in favor of the motion to split the question, effectively a vote against considering Ryan Alter’s proposal to cut reserve funding separately from the items he wanted to add to the budget. In favor of the motion to split were Pool, Watson, and Councilmembers Alison Alter and Paige Ellis. The changes were adopted by the rest of the council.

Council member Mackenzie Kelly voted against adopting the budget but did not object to amendments proposed by Ryan Alter. She had proposed numerous cuts to the city budget to keep the tax rate at this year’s level. She did, however, thank Watson for supporting a budget amendment to increase funding for cemetery maintenance.

Although several council members expressed satisfaction with the budget, both Pool and Alison Alter expressed concerns about the spending of the $4 million that could have gone into the reserve fund.

Alison Alter said, “I have no problem with all the things people want to invest in,” but warned her colleagues that proponents of all the things they funded this year will come back next year and ask for more money. She also warned that the sales tax was much lower than the city originally expected and that could cause problems down the road. She said all the funded items were “valuable items, but it’s a sensitive issue here and we have to be aware of that.”

Ellis expressed concern that she doesn’t have reserves to fall back on if the city needs them. She said she’s worried about wildfire risks, flooding and weather events like the ice storm of 2023. She said the Federal Emergency Management Agency will help with some expenses, but not all. She said she’s also concerned that the budget will become “out of balance, affecting our ability to issue bonds.”

Pool said: “I too am very concerned about where we are heading,” and warned that the 3.5 percent revenue cap would be even more difficult to manage in the future.

“I pray that we return to respecting our fiscal policies,” Pool said.

Pool and Alison Alter will leave the podium at the end of the year.

Fuentes told her colleagues that she was not concerned about the slight reduction in the reserve.

“A little over a year ago, we had a 14 percent reserve,” she said. She praised her colleagues and said they had done a good job. She said she was proud of the cost-of-living increase for city employees, which boosted the Fire and EMS budgets. Finally, she noted that they would not change the policy of keeping 17 percent of funds in reserve.

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