Austin’s proposed budget could cause increase in energy costs, property taxes

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City Hall

City manager Marc Ott and mayor Lee Leffingwell preside over a budget meeting at city hall Wednesday morning. The proposed budget will raise both property taxes and the price of utilities.

Photo Credit: Andrew Edmonson | Daily Texan Staff

The combined utility rate and property tax increase for “typical” Austin residents this year will be approximately $22 more per month, according to the proposed city budget.

The Austin City Council reviewed the proposed budget Wednesday for the 2011-2012 fiscal year. Between this budget and the forecasted budget from April there is a $9.8 million budget gap. The projected $22 increase comes from the summation of increases in electric bills, water bills and property taxes.

The major component of the projected monthly increase is based on a 12 percent increase for Austin Energy usage that City Council has not yet voted on.

Council member Kathie Tovo said there are some grim spots in the projected budget.

“I think it’s difficult for the taxpayer to look at the increase for energy, but the alternative is to raise $27 million,” Tovo said.

Mayor Lee Leffingwell said after this major change he expects the rate of Austin Energy fees to only increase by 2 percent annually.

“It’s kind of an attention-getting rate increase,” Leffingwell said. “This is because we haven’t had a rate increase since 1994, and this is basically catch up.”

A new fixed water sustainability fee is the other large component to the projected $22 increase for customers and homeowners who use an average amount of electricity per month. It also affects commercial customers, including Samsung Austin Semiconductor. The chip manufacturing company, which is undergoing a $3.6 billion expansion, will have a hefty water bill with the new fee.

Of the general fund, 65 percent is allocated to public safety, with the Austin Police Department receiving the largest increase at $16.5 million, according to the proposed budget.

“For me, public safety as a city is our number one priority,” Leffingwell said.

The funds would allow APD to maintain its ratio of two officers per 1,000 residents by adding 49 new officers.

Property tax is expected to increase by almost $3 per month for a home with a median value of about $182,228.

Personal property values are expected to increase by 30 percent, and land values are projected to increase by 20 percent. Commercial and multi-unit residential property values are also projected to rise but significantly less. The property value of single family residents is projected to decrease by 0.4 percent.

City Manager Marc Ott, who started working with the city in 2008 and created the projected budget, said he is comfortable with it.

“My entire tenure here has been about trying to manage through the economic downturn,” Ott said.

Printed on Thursday, July 28, 2011 as: Propsed city budget raises utility rates