Travis County Commissioners Court
August 30, 2005
Item 29
29, receive and consider fourth revenue estimate for fiscal year 2006 budget process. Ms. Patarro? And after we do this item, we will do the fire marshals office, number 30. I think we may be one shot. I guess we ought to give the clerk one. For her record.
>> that's the second part. The fourth revenue estimate is what we are dealing with today, and the planning and budget office has basically most of the numbers, but there is a new breaking news. First, the beginning balance rose roughly two million dollars, and that was based on a new estimation for expenditures, slight increase with revenue. Adding to that, which what we're doing now is we're getting ready to close our books, so we're looking at liabilities and set asides and that type of thing. And in the general fund, which we will add to this, we found that we're going to be able to decrease contingent liabilities for property tax refunds by $650,000 in the general fund, and $173,000 in the debt service fund. That is one-time money that will end up in the ending fund balance, so it's not ongoing. But what we do, so you understand what that is, is we keep in contact with the central appraisal district to find out what we think is out there in potential litigation with regard to taxes. And so when we do revenue estimates on an ongoing basis, we set aside what we think our best estimate of what might be lost through litigation. And then as new numbers come in and settlements are made, we make that adjustment. And so that's the adjustment that we can make this year. So that will be on top of what's in the fourth revenue estimate. The final av came in, and that increased very slightly to 62,500. The amendment to the central booking contract is in there. It comes up 797,000 because we had already contemplated somewhat of an increase in our original estimate, so that's why I didn't move up a full million dollars. There is an increase in money that the hospital district was going to pay the general fund, $75,000. We've got 690,000 additional revenue from the state for the reimbursement of the jury mandated fees. We have to pay more and they give us more, so that is somewhat of a wash. So that's some good news with the fourth revenue estimate. What I passed out to you is I’ve kind of been focusing on property taxes. And in a way it's kind of relevant to the discussion that you just had. And I’m going to have my staff e-mail this to you so you can reproduce it as much as you want. But the first sheet I think is probably the most important, and it impacts revenue, county revenue and gives a perspective toward it. And then I’ve got different renditions and backup behind that, but I think the first sheet is the most important. And one of the things that -- when gasb 34 came in, one of the things was differentiating between exchange and exchange transactions and non-exchange. And basically non-exchange transactions are like taxes. And that is you don't get quid pro quo. You don't go -- you go to the park and you pay for a park fee, that's an exchange transaction. And so non-exchange transactions are really taxes or tax like. And I think this is very interesting because it focuses very dramatically on the pressure that y'all have had with taxes and the focus on it. If you look at Travis County, and I separated this a little bit different. I looked at the general fund and the debt service fund because these are the two funds for both the city of Austin and Travis County that are financed primarily with taxes or non-exchange transactions. You can see in the general fund what we collect in property taxes and then beneath that I put what we collect for the debt service fund, because what that emphasizes is what taxes we take out of the community, no matter what you call the tax, what we take out of the community. So out of Travis County as a whole in terms of property taxes, we're taking about 307 million out of the community. The other part that's interesting is of the tax revenue -- and the only thing outside that for us is fines and fees and some grants. We only have 1.86% in other kinds of taxes. So out of the entire Travis County we are taking in the preliminary budget obviously there will be some changes, $312.9 million in taxes. Okay, look at the city of Austin. And this just shows the difference in the revenue sources, and it kind of reflects that new york question you had. And then you say, what does the city of Austin take out of the community, the city of Austin in tax or tax-like kinds of obligations? And I think this is really telling. From property taxes between the general fund and the debt service fund, they take out roughly $228.8 million of property taxes, but that only represents about 46% of the tax-like money that's pulled out of the community, which means there's 54% more. And what are they? Sales taxes and other small taxes, 135 and a half million dollars or 27.5% of their tax-like revenue comes from sales taxes. And in accounting literature, that would be called a derived tax revenue, so that conceptually is a tax. It's a derived tax revenue. Then you look at transfers from the utility companies, water and electric to the general fund, and that's $98.5 million. Now, if that money -- and this year the city is very up front about that, they're increasing the water rates by, I believe, it's five percent. And this again would be called in accounting literature a payment in lieu of taxes because this money is not being used to run those enterprises, the water and the electric. There is money left over, and that goes into the general fund in a tax-like payment in lieu of taxes operation, so that is significant. The other derived tax revenue as defined in accounting literature as the franchise fees and that is the city of Austin gets a franchise fee based on revenues of franchises that are allowed to operate within the city of Austin, and that's about $29.4 million. And that runs about six percent. So in all honesty that gives you a much better picture of the tax-like revenue that is pulled out of the community. Now, we're comparing a city to the whole county, but it shows that we are pulling out about $312.9 million, the city of Austin is pulling out about $492 million in tax-like activities. I think another thing -- this is interesting to me from a lot of viewpoints because all of the truth in taxation, and Commissioner Daugherty, you've mentioned truth in taxation and -- no, I guess it was judge Biscoe earlier today. When the legislature has focused on truth in taxation, they're just looking at property taxes. Clearly that's just a part of it for some organizations. For us it's everything. But for other organizations it's just part of it. So it's kind of truth, the half truth in taxation because there's a whole lot more out there that honestly needs to be looked at when you consider what comes out of the communities. The other thing is as you're looking at your abatement policy -- and I just happened to think about this while I was sitting there and you were talking about it, is when we abate our property taxes, that's our revenue that we're abating. And the only way we can recover anything from that is republican investment that brings more property taxes. If you are in a government like the city, you can give a lot of abatement in property taxes because that doesn't even contribute 50% of the monies that you're getting on taxes, and if in fact that bumps up sales tax transfers from water and utility or increases the franchise fees, that also greatly pushes up the amount of total revenue for that organization that they can get. So it's just kind of an interesting analysis to look at what comes out of the community because I know people are feeling the pressure of the property tax, but there's a lot of other taxes that are just not quite as clear. And I didn't look at other governments, other governments other than obviously the city of Austin, but that's the big one. So anyway, I just thought that might be interesting. I am going to have diana e-mail this to y'all so if you want to reproduce it or if there's anything you want to ask about it, I’ll be glad to provide that information for you.
>> okay. Thank you very much.
>> thank you.
>> so the information that you gave us at the beginning, that's been given to pbo?
>> yes, it has. The only new information is the 650,000-dollar reduction in liability and the debt service for 173. We'll get them those exact numbers, but we just found that out yesterday as we're going through looking at accounts trying to get our --
>> susan, in terms of the bottom line, and I know christian will go through this with us on the first day of budget, he faced the preliminary budget on the third revenue estimate or the second?
>> third.
>> the third. What is the difference in revenue between the third revenue estimate and the fourth revenue estimate which basically is what's new in play as we can think about going into markup next week. Where would I see that?
>> what's new in play is the -- [overlapping speakers].
>> I’m going to give you -- we do a new in play. We'll get you a copy of that in this by line item.
>> I can deal with it someplace else.
>> we'll get it to you.
>> we appreciate it.
>> thank you.
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Last Modified:
Wednesday, August 31, 2005 12:10 PM