Travis County Commissioners Court
Tuesday, August 24, 2010,
Item 3
Number 3, consider and take appropriate action on newspaper advertisements including a, public hearing on the proposed fiscal year 2011 travis county budget; b, notice of tax revenue increase; and c, notice of public hearing on tax increase. Good morning.
>> good morning. Planning and budget. You have before you a copy of the draft ads that are required to be placed in the newspaper in the coming weeks. I'll just go through them briefly and if you have any questions, please be sure to stop me. The first is the public hearing on the proposed fiscal year 11 county budget and that will run in the chronicle on september 8th. And it basically --
>> 8th or 9th?
>> thursday. 9th. I apologize. Thursday, september 9th. And that one is a notice to the taxpayer to come down if they would like and participate in a public hearing on the proposed budget. The second one is actually unfortunately out of order, but it's the notice of public hearing on the tax increase. And that is the one that will run on monday, september 13th in the austin american states man. And this one is important because we will be asking the commissioners court to vote on a tax -- a proposed tax rate on wednesday, september 8th, which is markup. So in order to meet the deadline for the austin american-statesman, and this is a notice of public hearing on a tax increase. If that rate is above the effective tax rate. The third one is one that will run also in the austin american-statesman, it will run twice, a notice of tax revenue increase and it will run on wednesday, september 22nd and a second time on saturday, september 25th. And this one notifies the public that the county of travis has conducted public hearings on the tax revenue increase. And barbara wilson is here if there are any questions that are legal in nature.
>> i have a question, i don't know if it's legal in nature, but i have a question. Maybe somebody can help me. As you know, according to my sources as of last night, aisd does not allow historic exemptions anymore in their taxing scheme. I'm just wondering what -- this did come up before the commissioners court before. We looked at maybe seeing what type of situation we could get as far as additional revenue, and in fact i don't believe aisd had a public hearing either. I just think they just decided to say, listen, we want to walk away from historic exemptions. I don't know how much additional revenue that is generated for them, i don't really know, but when this came before the court some time ago, there was one aspect of this that we did discuss exemptions that, you know, if we didn't allow historic exemptions as we do now. My question is still that i don't remember how much revenue that we generated if we -- travis county would not allow exemptions, historic exemptions. I'm just wondering if that would be appropriate, number one, under the upcoming public hearing scenario or if public hearing is necessary because if aisd didn't have as of last night i understand that they didn't -- they end up
>> [indiscernible] historical exemption, i don't believe they have a public hearing. Leroy, could you enlighten me or something?
>> a couple of things. When the court --
>> before you enlighten him, legally are we posted to have this discussion? Looks like the posting goes to the newspaper advertisements. We would have to -- in my view we would have to do a separate item which we could do next week. Although the court did vote to refer the matter for another study with the city of austin and other governmental entities and with an eye to taking action in the next budget cycle, but if a member of the court wants us to consider that vote earlier, in my view it would require a separate item, which we can do next week, but i don't think we're posted here. We're just posted for the ads.
>> that's correct, and to the extent that the question is directed to whether that needs to be included in the ads or something that needs to be discussed at that public hearing, we can answer that, but a discussion that would go into whether or not we ought to have historic exemptions and whether or not we should make a decision about historic exemptions today, you definitely cannot make a decision today.
>> no, no.
>> but i can tell you immediately that nothing in the ad will change whether or not you hear comments on historic exemptions at the time of the hearing on the tax rate increase. And i don't think that -- because the ads are set by law what has to be in them has to be in them and nothing is going to change. I don't think that you need to really consider what's going to be discussed at the hearing. Whatever people bring up, they bring up. And so it's not really something you have to address at this point. If there is someone out there who is concerned about historic exemptions being part of the amount that is taxed or not tax odd a property -- taxed or not on a property, they can bring that out without being address understand the ad.
>> the last time this came up, i had asked leroy nellie to look at what would the county actually gain as far as additional revenue.
>> that we are not posted for.
>> okay. All right. So i can't get the answer right now according to what they are saying.
>> perhaps you could have a meeting with him in your office.
>> we're going to revisit it.
>> let me make a comment directly related to the notice of public hearing on tax increase which is posted. In the third to last paragraph, it talks about it's statutorily which exemptions are included in the calculation, and it specifically statutorily disregards the exemptions and persons over 65 years old. Let me make a comment about those exemptions, and the same comment applies to the historical. The difference between the school district's taxes and travis county taxes is that school districts are not protected by the effective tax rate. Therefore, when they disallow exemptions, they receive additional tax revenue. Travis county currently has a $65,000 exemption for individuals that are 65 years or older. If in fact you reduced that exemption, which this court has approved it for f.y. 11 to stay in place, then you would reduce -- you would increase your tax base and appropriately reduce your effective tax rate, but you would not create any additional tax revenue unless you kept the same tax rate. So that's the difference between a school district and a county or a city. So i think that that may very well answer some of your questions in regard to exemptions in general.
>> historic exemption. So that applies to historic exemption also?
>> it applies to all travis county exemptions.
>> including historical.
>> but we certainly wouldn't take that action without a public hearing.
>> no.
>> because you are talking about 700 folk being adversery impacted. The other thing i thought the court voted to gather additional information, see what the additional revenue would be, you know, try to figure out -- i don't know that all the exemptions are inappropriate, but i don't know that all of them are appropriate either. And so i thought we voted to give ourselves an opportunity to learn more about them, look at them, try to figure out where we should draw the line for travis county. And then to the extent that we could generate additional revenue, we would. You know, to the extent we would hold in place the exemptions that have been in place for years, then we would vote to do so, but i mean i just think that -- in view of actions we've taken and what's before us today, we need to post a separate item to discuss this.
>> which i think is appropriate. I don't disagree with that at all, judge.
>> we can do it as early as next week.
>> if we can get additional revenue here in the general fund, that's all i'm looking to do. And, of course, that can be further discussed.
>> on this item?
>> this is on this item and the content of the ad. With regard to the content of the ad, the particular paragraph that you pointed out, leroy, is instructive, i think. Actually it's the fourth and third to the last paragraphs with regard to the average taxable value of resident homestead. I am wondering, from a legal perspective, is there any issue with adding information? I know there's a statutory minimum of information, but we could add information, could we not?
>> if you do not comply with the law exactly as it is written, then you have a risk. And if you wanted to add information, i would suggest to you that you are required to put the information legally required to be there in a quarter-page ad. Anything you want to add, you ought to add to the size of the ad because it will reduce the size that's in there. Having said that, if you want to add something and make a three-eighths-page instead of a quarter-page ad, you could probably add tonight the model, not at the end, as something that provides additional information. But i would not want you to think that you could put more information into your quarter-page and feel safe about it.
>> okay. Because one thing that strikes me in the good work that the tax -- that we've put together to look at historic exemptions, for instance, the tax team was put together to look at all the exemptions and statutory to provide relief to those most heavily burdened and least able to pay under a ad valorem system for which we are heavily bound. Far and away, what percentage is our revenue from -- our total revenue from property taxes?
>> almost 80%.
>> so the reason why i raise it the possibility of added information is it struck me in looking at the most recent local tax policy draft out of the tax team was the -- and i ran these numbers myself so i'm going to round them, round them so that i don't get in trouble, but it appears that even with our -- even looking at our average homestead valuation, the amount of tax imposed on this year on the average home would be $981.20, but that disregards homestead exemption and disabled and persons over 65 years of age exemption. Because when you look at that, our percentage of the overall taxes paid is significantly reduced. And i think that that's worthy of telling the folks. Because just running rough numbers, it looks like under a homestead exemption only, our percentage of your overall taxes paid to austin isd, travis county and -- the big five, goes down to 17% from around 22%. And then if you also add on senior citizen or disability exemption, it goes down to nearly 12% of your overall taxes paid in the region. I just want to be mindful of that and i'm trying to figure out how to tell that part of the puzzle too that we can provide tax relief and we do within that tax rate. Can we look at maybe adding a paragraph at the end, look at the legality of adding a paragraph at the end and look at the content of what a paragraph should say with regard to the effects of exemptions on your tax rate.
>> i guess the big question is if we want to impart that information, which sounds fine to me, i don't know that you want to put it in your legalry required tax notices. One is we never have, two is i think you do take certain risks that are unnecessary. Three is that i have never been left with the impression that the average person spends a lot of time reading these notices anyway. Seems to me that if --
>> [laughter] -- if you want to get that information out, there are better ways to do it. And so we probably ought to spend a little time trying to figure out what's a better way to get that point across to travis county taxpayers.
>> well, judge, let me say this. Both of you brought up good points.
>> three good ones.
>> four good ones. All right. But let me say this, when the average person that gets their tax bill, it comes from travis county, of course you know that nelda wells spears is the assessor-collector of travis county. And of course you have these entities of which she is allowed to collect taxes for, austin independent school district, you know, and a.c.c. Or the hospital district, travis county, city of austin, and a person gets a bill and they look at the tax statement and the first thing they think, oh, my goodness gracious tract is just one lump bill. Everyone really doesn't go that line by line and look at the individual tracking jurisdictions that are biting on this apple. And, of course, the biggest bite in the apple, of course, is aids. We know that. They take the biggest bite. But at the end of the day, they -- they say commissioner davis, my goodness gracious, why is my tax bill increasing so much? I can't -- i can't answer for aisd nor can i answer for the other taxing jurisdictions except for travis county. Now, but i do know this, as far as exemptions are concerned, travis county, i think, offers the most exemptions towards our taxpayers more so than anybody else. You get the 20% homestead exemption, you get the -- a 65 exemptions, the disabled exemption, you get -- $65,000 and things like that. You get all of the exemptions and then, of course, then what's left your taxes apply to that value of your property. So again, here we are faced with another situation as we go through this year by year where we as --
>> [indiscernible] and we're really not the true party involved in the taxing that goes on in the county. I don't really know how to -- i mean the tax bill explains it, but who takes the time, some folks are not taking the time, they are looking at the bottom line, and the bottom line is whatever you owe in taxes for all these jurisdictions and that's what ends up hitting us for just what i stated. And it happens more than not when people get angry about their taxes, they look at travis county.
>> commissioner, let me comment the tax groups that i chair and dusty and i co-chair does have a subcommittee chaired by our auditor on public education. And when you look at the tax bill, the problem, as you pointed out, commissioner, is that taxpayers don't look at the individual line items because it very clearly shows the amount of the total exemptions by taxing entity, and it's very clear that travis county and the hospital district give the largest exemptions.
>> exactly.
>> but the question is how do you get the taxpayer and the public to understand, and that's what this subcommittee is going to be working toward is to make a recommendation to the court for the f.y. 12 cycle as to how we can better educate the public.
>> maybe if we just had an update from the subcommittee in the next month with regard to what we're looking at as possibilities.
>> okay.
>> for education on that point.
>> sure.
>> because i think the point is lost that while the tax rate is the same for everyone, that exemptions apply to specific individuals for whom we think probably have the highest probability of -- of difficulty in paying property taxes as opposed to their real income.
>> true.
>> because property has very little -- has much less relation to one's income than it did when we originally decided to rely on it back in the 1880s.
>> and i just want to make sure the court also understands on the tax ads that the two ads, the notice of tax revenue increase, the notice of public hearing on tax increase will not only appear in the newspaper but it is also required to appear on tctv and it is also required to appear on our county website. So there will be that information available to the public. And that might also open up opportunities for public education as far as the website is concerned.
>> thank you.
>> we believe that these three meet the letter of the law.
>> yes, sir.
>> mr. Reeferseed, briefly.
>> briefly, no, no on tax exemptions for the disabled and senior citizens being canceled for cash revenue benefits? That flies in the face of years of careful, thoughtful self-government i thought we could be proud of in travis county, but no, for some reason it seems that by golly, you've suddenly got a budget bug up your bonnet and you want to take it out on the seniors and the disabled, and i'm saying no.
>> there's no discussion of reducing the senior citizen and disability exemption.
>> nobody is --
>> not on the table.
>> that's reassuring. I'm glad to be confused.
>> just wanted to make sure.
>> okay. Thanks so much.
>> one of the things in what we're talking about too that i think is important is that when our main source of revenue, 80% of it is the property tax. I think we are the most transparent in terms of taxation to citizens. Other governments have many other taxes that are not as transparent as the tax -- as the property tax. So what we get out there is our major source of income and it is very transparent, but sales tax, electric utility transfers, franchise taxes, there's a lot of drainage taxes that really do not sit out with the transparency that the property tax does. I think that's important to know too. And also that when in fact we have given the very most generous exemptions to seniors and homeowners and the disabled people, even though it is our primary source of revenue, the commissioners court in the 22 years i have been here has been very sensitive to the needs of the homeowner. And in tough times or whatever, you stood by that exemption. Even though it is our major source of income. So i mean, we look at this every year and i think, you know, from where i sit, you've done a really good job and our education committee will work on -- the tax code is complex. It's hard to understand. And we're going to work on an education program and something that can be distributed, put on our website.
>> thank you.
>> move approval of 3 a, b and c.
>> second.
>> > any nor discussion on the motion? All in favor? That passes by unanimous vote. Thank you very much.
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Last Modified:
Tuesday, August 24, 2010, 2010 2:30 PM
