Mayor Kirk Watson has put forth a proposal for a property tax increase that would require voter approval, marking a more restrained approach compared to other City Council members’ suggestions amid a significant budget crisis.
In a recent post on the Austin City Council’s message board, Watson proposed raising the city property tax rate to 56 cents per $100 of property valuation. He estimates this would generate approximately $76.6 million to help alleviate a multimillion-dollar revenue shortfall the city is facing.
Watson emphasized the balance he sought in his proposal, asserting that it is one that Austinites can support despite not being perfect. He did not specify how the increase would affect the average homeowner’s tax bill. However, estimates from the city budget office suggest that homeowners with properties valued at $500,000 would see an increase of about $243 in their annual property tax bill. Currently, the property tax rate stands at 47.76 cents per $100 of property value.
This proposal surfaced just a day after the City Council approved a maximum tax rate of 60 cents per $100 of value. The 11-member Council is expected to finalize the tax rate later this month.
According to state law established in 2019, if the council sets a tax rate higher than approximately 52 cents per $100 valuation, they must seek approval from Austin voters. This is due to a provision that mandates a tax rate election for local governments intending to raise the property tax rate by more than 3.5% annually.
Though other City Council members have shown support for a larger increase—with two progressive members advocating for a rate of 59 cents per $100 of value—Watson has expressed caution.
He underlined his desire to secure additional funding for city services without imposing excessive burdens on Austin taxpayers. He also highlighted that the city manager’s proposed budget has already factored in increases to utility rates and taxes, leading him to be judicious about any further rate hikes. Watson believes that while some voters might be open to a higher tax increase, the council must consider the implications on affordability for residents, particularly renters.
“In these uncertain financial times, I believe it’s crucial to strike a balance between the costs incurred by Austinites and the impact on affordability,” Watson wrote in his message.
The mayor also outlined potential areas for investment using the additional tax revenue, which includes $46 million for homelessness services, $7.7 million for the Austin/Travis County Emergency Medical Services, and $6 million designated for parkland maintenance.
It remains uncertain whether the council will design ballot language that ties the approval of the new revenue to specific budget priorities as indicated by Watson.
While acknowledging that his proposal doesn’t fully address all service needs within the city, including provisions for a 4% raise for city employees beyond next year, Watson is confident it represents a fiscally sound option with a reasonable chance of securing voter support. In conclusion, he reiterated, “While I see a [tax rate election] as needed in these uncertain financial times, I believe it’s important to strike a balance with the cost to Austinites, including those who rent, and its impact on affordability.”
image source from：statesman
