Travis County Commissioners could slash jobs, raise fees in wake of new property tax law

AUSTIN (KXAN) — Travis County Commissioners will mull budget implications of the new state property tax law during a Tuesday meeting and some of the options on the table include raising fees and cutting jobs.

The meeting will be county officials’ first steps in an effort to tighten the budget and generate additional funding since state lawmakers voted to put a 3.5% cap on property tax revenue, down from the current 8%.

Soon, it could cost you more money to go to your county park as permit fees could spike, and the county might charge more for contracts — like when it provides school resource officers. County officials said some of those fees haven’t been raised in decades.

Services like offering rental and utility assistance and food banks provided by the county and are also under review.

Internally, county officials said they’re considering eliminating positions in departments that have been open and unfilled for more than a year.

“We do agree that because of (Senate Bill 2) it’s going to force some serious cuts into our budget and what those cuts are the county is looking at as we speak,” Hector Nieto, the Travis County’s public information officer said.

The county’s Planning and Budget Office (PBO) is recommending a Cost Allocation Plan for revenue generating contracts that include a 36.18% indirect cost rate, approved by commissioners, for all contracts generating revenue.

One example is the county’s interlocal agreement with Briarcliff Law Enforcement. Currently, the county provides services for the area and the contract fees include operating costs. Through the Cost Allocation Plan, the county could recover several indirect costs including fleet management and maintenance, IT and radio system support, financial and legal support, human resource management and facility maintenance.

PBO is also recommending allowing the Court discretion on the amount of the indirect cost rate applied to specific contracts based on the benefit to the community.

History & Future of Travis County’s Budget

“Only twice we were at or above an 8.5% and that was due to an economic recession,” Nieto said. “In good economic outlooks, you would see where our tax rate would actually go lower and the Court would vote multiple times to lower the tax rate because the county was doing fine.”

Court documents show PBO has estimated the county will face “funding challenges in future fiscal years” since the majority of revenue comes from property taxes.

They estimate there will be around $30 million less in annual revenue and “budget flexibility” at the 3.5% cap.

“We now have to take into consideration our steady growth rate has been at about 4%,” Nieto added.

If at some point, governmental entities like Travis County would like to increase its property tax revenue by more than 3.5%, the legislation requires voter approval.

The 3.5% cap on property tax revenue will go into effect in the fall of 2020.

County’s Public Defender’s Office Future

The cap on property tax revenue commissioners are concerned about could also play a role on whether the county can move forward with setting up its first public defenders office.

County officials said they will now have to determine if they can afford it. Tuesday, commissioners are getting a status check on the grant process and where it stands.

MORE: Advocates lay out plan for Travis County public defender office

In April, commissioners approved a plan to bring in millions of state funds to support it. The total cost for salaries, benefits, and other expenses would run about $9 million a year. The first four years, grant money from the Texas Indigent Defense Commission would offset about half the total cost.