IN-DEPTH: Austin faces $200M budget shortfall due to COVID-19

Austin

AUSTIN (KXAN) — Austin city leaders said the city budget was looking good for 2020 until the coronavirus pandemic.

At present, Austin’s Deputy Chief Financial Officer Ed Van Eenoo estimates the Fiscal Year 2020 shortfall will be anywhere from $38.3 to $57.6 million, depending on how quickly the economy bounces back.

He said over the next two fiscal years, losses could reach more than $200 million. Revenue is down across the board from a $68 million loss in airport revenue, a nearly $40 million drop in the Hotel Occupancy Tax, and $9 million loss in city parking fees.

In order to tackle this decline in revenue, the city has already put a hiring freeze on about 600 nonessential positions and asked city departments to scale back spending on things such as training.

However, Van Eenoo said there is still a lot of work to be done to balance out the budget for the coming fiscal years.

“In the budget world we are one of these operations that hopes for the best but plans for the worst, I mean you have to,” Van Eenoo said. “I would love for everyone to have their job back and our economy is back open and normal and operating safely by October 1 or even sooner, but we can’t live in that world of optimism in the budget world.”

This could have a huge impact on things like public safety and pay raises, and could lead to cuts in new police positions, scaling back on new fire stations and freezing city wages.

“It takes money to staff fire stations and so that’s a big concern since most of the areas that are in need of a fire station have been in need for years and so now we will have to be possibly putting that off once again,” said Delia Garza, Austin’s Mayor Pro Tem.

“But with the current crisis and making sure that we’re addressing all the basic needs in our community for many who have lost their jobs, for many who are not working right now, it’s going to be the most difficult, easily the most difficult budget, that we deliberate on,” Garza said.

Another thing to keep in mind, a 3.5% cap on the city’s property tax revenue was set to take effect this year. But Van Eenoo said a provision in Senate Bill 2 allows cities like Austin to go up to the 8% cap at their discretion — without voter approval — because the governor issued a statewide disaster declaration. Van Eenoo said it’s an option they’re exploring.

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