Travis County Commissioners Court
February 15, 2005
Item 25
25. Consider and take appropriate action on fy 06 budget guidelines.
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>> ... So that there is not a disincentive for departments to strive to have a healthy ending balance. That the da's office was sharing that there are variations and certain kinds of court-related child preparation and presentation costs and that also the department has been striving to have ending fund balances. And I agree, we agree, the interesting thing is that there are a couple of targeted areas out there where literally hundreds of thousands of dollars have been remaining unspent for many years. So there may be some opportunities for redirection. And this da's office was not one of those, but one has a consistent approach of looking at everything. So we certainly are going to want to work carefully with the departments in any of those targeted opportunities for reduction. The other comment I received this morning was a letter from joe gieselman from tnr, and he copied members of the court. And in essence he has provided what I would call a head's up. In essence saying as a result of the February seventh decision of the court regarding the goal, changing the goal for fair to good roads, from 70 to 75% additional resources are going to be required and the court was fully appraised of that on the seventh. And he also is providing a head's up that the ongoing cost of operating and maintaining parks is a substantial commitment and may result in additional expenditures and additional resources in the future. And that is understood, I think. Certainly the court was well aware on the seventh when it approved the overall strategy of additional resources and the parks expenditure pattern has been a target of conversation and discussion for the last couple of years ever since these large metro parks have come online. And those are the two comments that we received out of the 151 that we received from the proposed draft guidelines.
>> anybody else here on this item? Questions for the court? We want to give county managers an opportunity to review the guidelines before approval, and we have done that. Move approval.
>> second.
>> discussion? Yes, sir.
>> christian, is it our intent that when we talk about the two percent -- allowing no more than two percent above the effective tax rate, do you anticipate that that will include what we may pass if this bond advisory committee comes back to us with 160 million, whatever it comes back? Might that push it up even more than two percent? Or do you anticipate that that would be in that?
>> I anticipate that will be an '07 issue. The bonds that will be issued -- that will be voted upon in November of '05, the first issuance will likely be in the December through February of '05 or '06 time frame. And the receipt of those bond funds will be in the March-april time frame of '06, which results in an '07 impact on the -- as the first impact on the debt service. So the answer to your question is no.
>> what do you anticipate or what could happen with some sort of an appraisal cap? Have we discussed that with the auditor in the event that something like that happens? Would that potentially have some effect.
>> we have been living with an appraisal cap for many years. It has had no impact on us. And the calculation of the effective tax rate revenue, it has an impact on the effect of tax rate, but it has no impact on the revenue received by a government that establishes its revenue targets in relationship to the effective tax rate. So whether the cap is 10 percent, five percent, it has an impact on the question of who pays, but it has no impact on the amount of revenue received at the effective tax rate. And yes, I had multiple conversations with the auditors and others on that matter. No, it does affect a government that simply sets the rate, keeps the rates the same and doesn't use the effective tax rate requirements. That has an impact.
>> I know that susan is bringing those numbers, and I can honestly tell you that I haven't had the time lately to sit down and to run my own models of that. I've taken people for their word. There's something that inherently tells me that that may not necessarily be true with regards to appraisal caps not affecting revenue. I mean, it just makes sense to me that i'd like to see the comparison in the last five years about how we have increased -- because we certainly have increased revenue, I would think, whenever you take into consideration that appraisal fluctuations have something to do with revenue generated. You may be able to take me through into the mathematical in a real quick, mathematical exercise here...
>> real easy. Values go down 10%, effective tax rate goes up 10%.
>> I understand that.
>> if there's a cap -- and let's say the hypothetical is you cannot increase values at all. The cap is at -- is in essence zero. You must not allow any change, therefore the effective tax rate does not change. Wherever the values go on the scale of from zero to 10 percent up or down, the effective tax rate fluctuates in inverse relationship. Values go up, tax rate goes down, values go down, tax rate goes up. Where those property values land is in part the tax cap question. We have had a 10 percent tax cap for quite a number of years. On certain properties that go beyond 10%. So mathematically, the simplest way I know how to explain it.
>> and I do understand that, but I don't think that the average, everyday person on the street understands that.
>> you are absolutely correct.
>> which is the reason why appraisal caps sell to the everyday person on the street, because all you hear about is 16 years ago I bought my home for $134,000 and it's now worth $462,000 according to the appraiser. And the average, everyday person goes, wow. Somebody is getting a lot bigger check from me but the relationship between what they pay and say the tax rate with respect to the effective tax rate is really something that goes beyond people. And I think that's the reason that we have a real challenge on our hand with coming out and looking like, well, we're really not supportive of that because my first response when people start talking about how badly they're getting beat up with regards to their taxes, I mean, my first response is usually, you live in travis/austin, and your home values in this central Texas region compared to living in basically the same size of home in harris county or a dallas are a lot different. And that is what -- that's what drives it. So then people say well, you're right. So you kind of get them off your back for a little while, but it's a tough sell to get the average, everyday joe to understand that. Yeah, susan?
>> as I was sitting here looking, I think what christian said was absolutely accurate, but when you take the tax bill that comes out, and I use my own as an example because mine is pretty much the average homestead. So when we talk about the average homestead, the amount of money that I pay to Travis County every month is about $67. That's about what it costs to have digital cable and hbo. It costs me to drive my camry 12 miles. I live in circle c north, $85 a month just for gasoline. And my Travis County taxes are $67 a month. And for that $67, we support 16 district courts, we have the entire juvenile. Justice system, we have the entire corrections system, which takes care of every arrest that's coming into Travis County. We pay for all of the county roads. We pay for all the tax collections. We pay for the financial controls, all the buildings. $67 a month is pretty much a bargain. But the people like me get a bill that on the bottom it says $4,800. And the Travis County bill is a very small part of that. The other thing that's confusing is i've been analyzing this and there are different exemptions that governments can give. Forget that 10% cap, which is already there. For instance, the city could give a 20% homestead exemption. They have chosen not to do that. We can give a 20% homestead exemption. You have chosen to give that. The school by law has to give a 15,000-dollar exemption. They could give more, they've chosen not to do that. So without talking about why they did what they did, we have given the maximum that we can under law to the homeowner, and we also give an over 65 exemption. So christian is right, when you look at the rates, I predict this year the city of Austin will point out how much lower their rates are than ours, but because they don't give that exemption on my tax, for instance, I think I paid $890 tax to the city of Austin, even though the rate was lower, because that was multiplied against a value that did not give a 20% homestead exemption. So it is extremely complex. It is very difficult to tell people. But I will tell you looking at truth in taxation and the effective tax rate, if you follow the law it is very fair. And it's just it's very complex. And all of these governments are kind of co-mingled on the same tax bill, and that makes it even more confusing. But from what you are doing, you know, i've got to say even if I didn't work here, $67 a month is pretty much a bargain for the justice and public safety and roads and parks that this county provides. As I said...
>> so you have roughly 191,000-dollar home --
>> yeah, about 190.
>> and how long have you lived in your home?
>> 10 years.
>> and when you bought it, what was the price of the home?
>> about 148, 150.
>> so it's gone up 25%.
>> right.
>> whenever you talk about people that have owned a home for 16, 18 years, in some parts of town -- if you live in travis heights, for example, crestview, it is not -- you are probably not the barometer for what so many people deal with. And those are the people that really --
>> there are homes in the central city that have gone up -- people in my office have have gone up 5, 600 percent in value, but that 10% cap has locked in on those people so that in terms of their value, they are protected at that pen percent.
>> but each year it ratchets --
>> yes, it does.
>> they'll eventually get it out of you. It may take them eight years, but if you're 10% for eight years, you're 80%, cut it any way you want. And y'all, I really -- I think that the bang for the buck that you get out of county government -- and I have gotten a lot better at explaining that. And I'm sure all of us have. The unfortunate thing is that it is complicated for people to understand, but I do -- this exercise is good because some of the people that do watch this probably go, well, I don't know that I understand it any more than whenever they first started talking about it, but if we can't do anything any more than just get people to understand what you get for county government and what we are statutorily mandated to do, which as long as we continue to tell that story, I think that we have a fighting chance of getting people to understand. People just don't really know what we do.
>> and people have been pressed with increases in cost of living and so has the government. And gasoline taxes have gone up. We at the county have had to pay more for gasoline. As food prices have gone up, we have had to pay more food in our two facilities where we are housing children and adults. So all of those pressures that have fallen on taxpayers have also fallen on the government and forced us to charge more for those services. And then the state has in fact increased like our spobility for inda -- responsibility for indigent defense. That is not a factor of inflation, it's a factor of what statutorily now we must do. So all of those things -- e.m.s. Has been a huge driver in our tax bills in the last few years in terms of percentage of increase. And again, that's an expensive operation, cost of gas goes up. Health insurance costs go up and we have borne those here. So all of those things are a problem, but they have gone up for the government too. It's not really -- what has been engaged in really is the cost instead of what you get. When we made a commitment to spend and issue bonds and the people of this community approved $100 million of right-of-way to give the state of Texas for ih 130 and i-45. That now costs dollars a year to pay that money back. Did that increase taxes? Yes, it did. There have been actions taken and voted on and necessary actions that have driven that as well. Christian's right. The effective tax rate does not let the value of your property have to pay those increases, but those are real increases that we -- I just heard, well, joe was saying what was happening in road. If you want better roads, it's not free. If you want parks to be continually maintained, it's not free. The building the same thing. If you want to maintain your building, just like people maintain their homes. So it is -- I think that because of all the rhetoric, we've gotten off of what it cost to render services and acting like there's some artificial thing out there, appraisal districts or revenue caps that somehow will make all of this go away. I mean, they can do that, but it doesn't impact the cost of gas, it doesn't impact the cost of indigent or what it costs to house a prisoner, it doesn't.
>> when you say gas, are you talking about petroleum?
>> I'm talking about gasoline for cars.
>> the gasoline tax hasn't gone up. The price for gas has gone up. We are imminently aware of that because we're at campo meetings trying to get people to understand that part of the reason that we don't have money to do some of the necessary things we need to do roadwise is because we haven't had an increase in the tax of gasoline. Petroleum itself has certainly gone out the roof, so I just wanted to make sure that those people that are listening -- [overlapping speakers]
>> you're right, the price of gasolines that gone up. Unfortunately, you don't have a sliding scale there for percentage of tax that would go up, which probably would have allowed us to not do some of the things that we try to take on. Thanks.
>> it comes to nothing more than artificial manipulation of value. It just is. You're right. Central city has been hit really hard. Everybody knows I live in crestview, a central city neighborhood. And I bought in 1982 for $55,000. We don't have 55,000-dollar homes in central city Austin. All a matter of public record. The appraisal caps helped because for anybody in my neighborhood to be hit with 20, 30, 40% increases in one year, that's a lot -- that's hard to bear. But I will tell you I hit market two years ago, so it slowed it down during those years, but I caught up. There are many neighbors who have lived in the central city that have now caught up. So market has now caught up with what my capped value was. And I will tell you in terms of what market was in crestview, homes are rue 10ly selling for 185 and more. So that is the market. We had a meeting of cuc, conference of counties last week, which was quite instructive. The first thing out of her mouth was saying I am against appraisal caps because they are an artificial manipulation of what's going on in the market. And here's the fact that she gave us that I think is an incredibly instructive, judge. And it's a short one.
>> thank god for that.
>> the legislature when governor bush was here, when they offered tax relief when he was the governor, it was a billion dollars' worth of tax relief that was returned back. She said that of that one billion dollars in tax relief that went back to cities, counties and school districts, it all evaporated in two years. But here's the statistic that's the killer. 940 million dollars' worth of value was put back -- was eaten up by school districts. Only 60 million of that tax relief went and was eaten up by cities and by counties and by hospital districts and all other taxing districts. The problem is what's going on in school districts. It is all of that happening. It like it wouldn't have been bad if my value went up to 194, and it did, if the tax rate -- if the school taxes had not stayed down to where they were back in 1982, but it hasn't happened that way. The school taxes that are killing us. She also made the point that in some counties, harris being one of them, there is a serious problem going on with appraisals and with how their appraisal districts operate. But that is not the situation in most counties around the state of Texas. Her point was where it's broken, fix it. Well, where it's not broken, don't break it. So the problems in the school district, the problem with school finance and where we have individual problems with appraisal districts, and some things are being offered up by cuc in terms of how to deal with those very specific problems. It's all there, but it's an artificial manipulation, period.
>> any more discussion? All in favor of the motion? Show Commissioners Sonleitner, Gomez and yours truly voting in favor. Voting against, Commissioner Daugherty.
The Closed Caption log for this Commissioners Court agenda item is provided by Travis County Internet Services. Since this file is derived from the Closed Captions created during live cablecasts, there are occasional spelling and grammatical errors. This Closed Caption log is not an official record the Commissioners Court Meeting and cannot be relied on for official purposes. For official records please contact the County Clerk at (512) 854-4722.
Last Modified:
Wednesday, February 16, 2005 8:38 AM