Austin (KXAN) — On Thursday afternoon, Austin City Manager Spencer Cronk presented a webinar preview of Austin’s proposed budget for Fiscal Year 2020-2021 to the Austin Chamber of Commerce. Cronk, as well as Austin’s Deputy Chief Financial Officer, Ed Van Eenoo, answered questions from members of the Chamber as well as Austin Chamber CEO Laura Huffman.
A look at what’s on the table
Cronk told the Chamber that the FY 21 budget is “really one of the most challenging budgets we’ve had to put together in recent memory.”
The total proposed budget is $4.2 billion. Deputy Chief Financial Officer Ed Van Eenoo has said that’s down 2.5% from the FY 2019-2020 budget, but the general fund will stay at the same level at $1.1 billion.
The budget proposes a 3.5% property tax rate increase, which the city says will equate to a total $1.04 per month increase for the typical tax and rate payer. Cronk says that property tax rate increase is “the lowest such increase since Fiscal Year 2004-2005.”
He added that the rates proposed to be charged by city departments are similarly being held at a minimum.
Cronk said this budget also recognizes the possibility of a tax rate election in November to fund the transportation plan envisioned by Project Connect.
“Weathering this crisis should not jeopardize our once in a generation opportunity to revolutionize our transportation system,” Cronk said.
Despite the pandemic and the economic fallout that has come as a result, Cronk noted that the City’s budget has not been hard hit as many other municipalities. He said that this budget does not propose any reductions to the current level of city services Austinites experience, but rather has re-prioritizations of efforts and dollars within the city.
The proposed budget is expected to restore the city’s general fund reserves to “a healthy 12% level,” Cronk said. He noted this is possible due to the city’s past conservative financial practices and its “robust” reserve funding.
“We are fortunate in that we have not had to cut any of our programs or services in this current budget,” Cronk told the Chamber.
Across all city funds, he said, the city anticipates ending the current fiscal year more than $200 million — or nearly 5% — below budgeted projections.
Reimagining public safety
Cronk said this budget comes at the time the city is facing two momentous crises: the COVID-19 pandemic and movement to end systemic injustices experienced by people of color at the hands of public safety institutions.
“In times of crisis a budget acts as a path forward” he said.
This proposed budget, Cronk said, accelerates the process for “reimagining our public safety system.”
Many in the Chamber had questions for Cronk about a component of this year’s budget: reimagining policing.
Following the death of George Floyd at the hands of police in Minneapolis and the death of Mike Ramos, who was shot and killed in an incident with Austin Police, demonstrators and community groups have called for reductions and reallocations from Austin Police Department’s budget.
In June, the Austin City Council approved several resolutions focused on police reform and racial justice.
One of the items directed the city manager to eliminate open positions within the Austin Police Department that APD cannot fill and asked Cronk to look at redirecting those funds to other services.
Last fiscal year, APD operated with a roughly $434 million budget. Earlier this year, in April, the city proposed a $445 million 2021 FY budget for APD. After the protests and the council resolutions, the latest proposed budget for APD is now at $434 million, reflecting the $11.3 million cut.
Some community groups in Austin have called for cutting $100 million or more from the police budget.
The proposal for FY 21 does include taking $11.3 million from the police department and reallocating it to other departments and services.
Cronk acknowledges that the FY 21 budget is “just a step” in accomplishing the goals for reimagining public safety that council established. He explained that this process will take a number of steps over the course of the next year in the form of future budget amendments that will be brought to council.
He told members of the Chamber’s video call that the city is just starting to define the stakeholder groups who will have input on this “reimagining” of public safety.
Cronk noted that he wants “to ensure everyone has a chance to weigh in on what public safety means to them” but he also noted “what is currently happening, the status quo cannot exist moving forwards.”
In the proposed FY 21 budget, Cronk reiterated that the actual number of APD “boots on the ground” would not change.
However, Cronk noted, over time, APD numbers could see some impact as the five-year staffing plan to grow the department’s size has been “basically put on pause.”
Van Eenoo noted that APD currently has almost 2,000 authorized personnel and around 170 vacancies, with around seven to eight officers leaving per month.
Additionally, the city expects to have cadet classes again during fiscal year 2021 to fill some of those vacancies.
COVID-19 Economic recovery
Cronk also discussed the ways in which COVID-19 has impacted Austin, both in terms of actual loss of life and in terms of financial strain.
With many people out of work during the pandemic, Cronk noted, “we need a strong business community that provides those jobs.”
Parts of the city have been hard-hit by the economic fallout of the pandemic as well, he explained.
Cronk said Austin’s airport and convention center “have been hit particularly hard,” with those two departments anticipating revenue shortfalls of approximately 30%.
Additionally, as a result in the decrease in the number of people traveling, Austin is seeing a decrease in dollars generated through the city’s hotel occupancy tax.”
As a result, Cronk said, Austin is going to see “a significant reduction in funding” for cultural arts, historic preservation and live music, all of which are funded through Austin’s hotel tax revenue.
“I have a request for this group to see what they can do, whether on a personal or professional level, to double down in your investments for important cultural and arts communities here in Austin,” Cronk told the Chamber.
The city also is using federal funding provided through the CARES Act to fuel a $272 million dollar framework for the city’s COVID-19 response. Cronk said this response includes planned expenditures of $106 million for emergency response, $63 million for medical and public health needs and $103 million for programs providing economic support.
What happens next?
Cronk noted there will be input meetings for the FY 21 budget on July 23 and July 30, then budget work sessions within the city council on July 28 and August 4. Austin’s budget adoption process begins on August 12.