Council on City’s 2019 Budget: Affordable Housing and Streets In; Homestead Tax Exemption Out

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City Manager Sheryl Sculley (center) and Mayor Ron Nirenberg (right) listen to staff presentations during City Council's fiscal year 2019 budget goal-setting session.

Iris Dimmick / Rivard Report

City Manager Sheryl Sculley (center) and Mayor Ron Nirenberg (right) listen to staff presentations during City Council's fiscal year 2019 budget goal-setting session.

During an eight-hour budget planning meeting Wednesday, most San Antonio City Council members supported staff recommendations for housing initiatives, increased spending on street and sidewalk projects, more police officers, and better compensation for City employees and council aides.

A 5 percent local homestead tax exemption didn't make the cut, as only two members, Councilmen Greg Brockhouse (D6) and Clayton Perry (D10), out of 11 supported such an exemption.

City staff will formulate a budget proposal based on these priorities over the next two months. City Council will review and possibly amend the proposal in August and vote on the 2019 fiscal year budget on Sept. 13.

Much of the conversation Wednesday focused on housing – specifically the city's affordable housing gap. Mayor Ron Nirenberg's Housing Policy Task Force is weeks away from producing formal policy recommendations, and the costs to implement them remain unclear.

The City's General Fund this year will have $13.2 million more available than at budget adoption after all other obligations are subtracted. Council largely agreed that money should go toward fulfilling a $110 million commitment Nirenberg has called for to increase the street maintenance budget from $99 million.

"We'll target streets in the greatest need of improvement, regardless of council district boundaries," City Manager Sheryl Sculley said. Last year, surplus monies went to the districts with the lowest average street conditions. Districts 1, 2, 3, 5, and 10 received $35 million among them this year and will receive an additional $35 million during 2019 as part of that commitment.

Brockhouse and Councilwoman Ana Sandoval (D7) both prefer the "greatest need" method to allocate the $11 million, but only Brockhouse suggested using the second $35 million-by-district funding similarly – citywide.

“We need to re-look at the entire equity conversation," Brockhouse said. City Council agreed to further discuss and analyze the so-called "equity lens" used in the 2018 budget and across City departments.

Brockhouse was the only Council member to speak up in favor of funding 25 additional police officer positions for fiscal year 2019.

The City can't keep up with vacant uniformed positions in the San Antonio Police Department as it is, City officials and Council members said, so that money might be better spent filling the vacancies it has instead of making that gap between funded and filled positions wider.

Crime has decreased this year in San Antonio by 24 percent compared to this time last year, said Deputy City Manager Erik Walsh, adding that calls for service decreased by 9 percent and arrests are up by 13 percent.

"We didn't really hear that Council members wanted more police, but rather a more aggressive plan to fill vacancies," Sculley told the Rivard Report. That is, save for the exception of Brockhouse's funding preference and Councilwoman Rebecca Viagran's (D3) request for a substation in her district.

During these annual goal-setting sessions, City Council members simply signal support or disagreement of budget priorities – they don't vote.

Consultant Francisco Gónima, the meeting's facilitator, said priorities require a "critical mass" of support before being included in the budget proposal. "If you're alone in the wilderness, we're going to move on," he said.

Perry and Brockhouse were "alone in the wilderness" of local homestead exemptions on Wednesday. While most Council members agreed with City staff's analysis that an exemption would disproportionately affect the budget compared to the minimal tax savings for residents, they argued that every little bit helps when property values increase.

The City collects 22 cents of every property-tax dollar; the rest is collected by Bexar County, the Alamo Colleges District, independent school districts, the San Antonio River Authority, and other agencies. The City has no control over school district tax rates, Sculley said, that continue to rise to make up for lost revenue from the State.

"You want affordable housing, but yet you can't reduce our homeowner's tax rate," Perry told the Rivard Report after the meeting. "Every other rate [SAWS, CPS Energy bills] has gone up over the years ... we had a surplus and we could have at least given a 5 percent exemption" instead of allocating that money to street improvements.

"You can't pry their fingers off of a dollar here in the City," he said.

Taxpayers could gain anywhere from $27 annually, on a $100,000 home valuation with a 5 percent exemption, to $558 per year, for a home valued at $500,000 with a 20 percent exemption, the City’s Chief Financial Officer Ben Gorzell said. Meanwhile, the City would forgo substantial funding for its administrative and public services – $6 million to $44 million, he said.

Councilman John Courage (D9) suggested the City use a $5,000 exemption for homestead property taxes, but that idea did not gain other Council members' support.

Nirenberg called the 5-percent local exemption proposal more "symbolic" than effective.

San Antonio is the only major city in Texas without a local homestead exemption, but it does offer exemptions for people with disabilities as well as exemptions and tax freezes for senior citizens.

Brockhouse called the City's disability exemption "woefully inadequate" compared to other cities.

A higher disability exemption could be feasible, but it would require more analysis than time allows for this budget cycle, most Council members said.

Council also reached a "critical mass" of consensus for additional support for SAPD's Mental Health Detail, programs that combat domestic violence and partner abuse, and additional funding ($10 million) for VIA Metropolitan Transit to reduce wait times for passengers at bus stops.

While almost every Council member asked for new projects and initiatives, none suggested cutting specific programs – save for Brockhouse, who proposed an overhaul to trim "the fat" off services the City provides. He made a similar request during budget discussions in 2017.

For the next two months, Sculley will work with department heads to find savings and budget tweaks to make the Council's priorities a reality, she said.

"We'll use technology to make improvements, we'll do some things differently," Sculley said. "We're going to work it all summer.''

 

12 thoughts on “Council on City’s 2019 Budget: Affordable Housing and Streets In; Homestead Tax Exemption Out

  1. I’m extremely disappointed in our city leaders. San Antonio is no longer an affordable place to live. Our property taxes have increased nearly 50% in the 5 years we’ve owned our house. Faced with increasing expenses and a job market that is frankly anemic for professionals like us who are not in the medical field, we’ve been looking at Houston, which offers exponentially more in the way of job and salary options. I thought for sure the taxes there would be way more than ours here. I was shocked to find out that a Montrose home in Houston valued similarly to mine here in Monte Vista was paying 40% LESS in taxes, thanks to the various exemptions their local taxing authorities offer! That represents a lot of money, and coupled with the job market there, is a very appealing option. And we aren’t the only ones considering such a move-many of our colleagues have made or are making similar moves. If San Antonio wants to attract (or just retain) young, professional homeowners, its leaders MUST re-think this option. You have to offer something other than culture to get people who are not born here to stay; if it’s not jobs or convenience, then it’s got to be affordability. I would have been thrilled with 5%, because at least the city would be doing something to help us out (look at super-desirable Austin-they even have 8%!). Instead, the city leaders are only driving us away, even if just to a suburb or Alamo Heights, where the taxes are also lower.

    • it costs a lot of money for the city to pay for sprawl, lots of additional services needed for the city (this drives up the city’s tax rates). we need to allow for more density in the inner city, less building near/past 1604 and this can taper property taxes. plus, call your state representative and have them push for better education funding, this would have big impact on our property tax bills.

      • Yes to density! Yes. No one wants that, but you need it for more equitable housing options, transportation initiatives, services downtown (grocery stores, etc.) and more. I am sick, however, of pouring good money after bad down the education rathole that is the SAISD. No one wants to live in a place that is highly taxed and poorly educated. Yes, education is the biggest portion of our property tax bill, and yes, the state needs to fix that funding nightmare.

  2. When you consider the whole picture for existing homeowners, SA is pretty darn affordable. First if you own a home you have some wealth . 2nd if you own a house with a loan you are getting a big federal welfare subsidy through the mortgage interest tax deduction. 3rd, you don’t pay income tax to Texas, and the money has to come from somewhere, so sales and property tax it is. 4th rising property values means you are building wealth and you can leverage that wealth and use it to generate more income so you can afford your taxes (if your property value increased $100 and you pay 3% of that back in extra property taxes, you just made $97. Congratulations! Now you can invest that in something ). City Council has had more lengthy discussions about adding a more generous homestead exemption, and an important conclusion was that it benefits the most wealthy people the most, because the more your home is worth, the bigger the exemption you get, so people who could use relief don’t even benefit that much. The article didn’t quite capture that, but it was an important reason I think that City Council decided to not move ahead with the extra homestead exemption idea.

    • Property owners are the ones footing the bill! For more equitable, affordable housing, you need to have higher density housing options downtown, where it should be more densely populated. Even Ron Nirenberg admits that its tough to build up and approve infill development downtown, where there are so many single family homes. It has to change and it’s painful, and no one will step up and do it.

  3. If District Council persons did not ask for more police, they have not been listening to there constituents! SAPD is already understaffed and more than 800 officers are eligible to retire in the next year!

    This can’t keep happening. I believe crime is down due to a combination of good police work along with citizen volunteers like Citizens On Patrol.

    The people of San Antonio deserve more police officers NOW.

  4. The 22% City of San Antonio tax rate, mentioned in this Rivard Report, and, discussed in the City Council meeting, is not as relevant as the tax rate increases by the Bexar County Appraisal District.

    If the Bexar County Appraisal District increased property taxes by 50% during the past five years, this translates to a 10% increase per year. This 10% rate is more relevant than the current 22% City tax rate.

    The City, along with all taxing entities, should justify their specific tax rate increase by first revealing their County appraisal districts rate increases, and, compare those increases with increases in City administrative and services costs.

    Taxing entities do not have to increase their specific rates if the Appraisal Districts made sufficient rate increases.

  5. ““We’ll target streets in the greatest need of improvement, regardless of council district boundaries,” City Manager Sheryl Sculley said.”
    The city still doesn’t understand how social equity works with the budget…happy to see its not by district anymore, but there should also be consideration for nearby demographics and poverty when setting priorities on which areas get updates to streets, sidewalks, etc.

  6. It’s so heart breaking to see Texas slowly become a high tax state. People continue to vote (or sit on their hands) for ever higher school taxes, bonds, and big government politicians. The poor are told they don’t have to pay we’ll make the “rich people” pay. We know who the “rich people” are, anyone who is breathing.

  7. The city is requesting more money wa wa wa wa wa. It’s easy to spend other people’s money then ask for more when you run out, the waste that this mayor and fellow city politicians have made is ridiculous. Let’s look at a few, new curtains for the mayor’s office in excess of $8000, the changing of a street crossing into a rainbow so that everyone knows we are diversive, Stainless steel bathrooms for tourist, the thievery of historic statues and monuments, needless concrete street barriers that create more congestion than the center turning lane, changing street names and signs, these are just a few of the wasteful spending. Now you want to talk about property taxes, my opinion is that the SA colleges should fund themselves with tuition fees if not good bye, SA river authority should be funded by tourism fee’s after all that’s why they raised there user fees, and the biggest “Affordable housing” start putting people back to work and make the rules more stringent, enough of fraud.

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