Wednesday, September 13, 2017

#atxcouncil: Late Breaking opportunity to curtail corporate welfare in budget?!?

"If we endure,
We shall also reign with Him.
If we deny Him,
He also will deny us."
2 Timothy 2:12

Sign us up:
Austin’s 2018 budget discussions are crawling to a close this week, and City Council members are looking for more cash.

Council Member Leslie Pool began the week’s talks Monday with a request for the city to revisit its economic development payments to the Domain — revitalizing a debate that’s been ongoing for at least a decade.

It wasn’t clear whether the suggestion had any support to move forward, and the council didn’t immediately return to it after an executive session to discuss legal matters behind closed doors. The council is expected to adopt the budget sometime this week. The fiscal year begins Oct. 1.

Austin in 2003 approved a $37 million tax break over 20 years for the Domain in exchange for the development creating jobs and affordable housing. Some buyers’ remorse settled in after that, and a push to revoke the Domain’s incentive package became a ballot proposal in 2008, but voters rejected it.

The city’s agreement with the Domain, which is in Pool’s North Austin District 7, includes a stipulation that any payments are subject to agreement from future councils. But Mayor Steve Adler and Council Member Jimmy Flannigan pushed back strongly against the city backing out of its end of the economic incentive agreement, saying it would be a terrible precedent to set. Austin needs to live up to its deals, they said.

“Every time, as a city, we talk about going back on a previous agreement, the next agreement becomes more expensive,” Flannigan said. “Every time we send a signal to the community that we’re not going to hold ourselves to agreements we make, the next negotiation becomes more expensive.”


Some council members have expressed frustration with the budget overall and want more funding for health and social programs.
  • While the Statesman article says Pool is a longstanding opponent of corporate welfare, this is the first time we remember hearing her speak about it.  We will point out she voted for the Merck deal back in April.  Still, welcome to the fight!!!
  • This actually builds on a recent experience of our own.  Last week, we attended an event where we were able to come to an agreement with several people with different views from our own to cut corporate welfare in order to create room for both tax relief and social services.  Thus, this might be an outline for a "grand bargain" on the city budget.
  • Broadening the tax base allows you to lower the tax rate.
  • Flannigan's argument is cute.  The opt out clause was part of the original deal to which the developer agreed.  Thus the city wouldn't be backing out of anything but merely executing authority it already has.
  • Speaking of Flannigan, this is the biggest contrast with his predecessor during his time on the council to date.  If Flannigan really wants to make this a hill on which he's willing to die, we are absolutely willing to make this a campaign issue in 2020.  Remember, District 6 residents are the one's paying the higher property tax rates that are the natural results of this sort of carving up of the tax base.
  • Speaking of which...have we mentioned that broadening the tax base allows you to lower the tax rate?!?
  • Broad base, low rates.  Broad base, low rates.  Broad base, low rates.
Bottom Line: Anything that moves us away from special privileges for big players and towards clear and consistent rules for everyone is a trend we should encourage.

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