AUSTIN (Talk1370.com) -- The Austin City Council moved one step closer to putting a property tax increase before voters in November, approving a maximum tax rate Thursday that would represent a 25 percent increase.
Council members voted unanimously Thursday to set the maximum tax rate at 60 cents per $100 of taxable valuation. The city's current rate is 47.76 cents.
Under state law, cities and other jurisdictions are typically limited to a maximum increase of 3.5 percent over the "no-new revenue" rate, without having to seek voter approval. That would be a rate of 52 cents, which is what City Manager T.C. Broadnax's budget proposal was based on.
Mayor Kirk Watson says the move is all about flexibility. "We want to avoid being in a situation where we're precluding consideration of where [the council] might want to end up,” Watson said Thursday.
If the proposed increase is finalized, it would mean the average Austin homeowner with a home valued at $500,000 would pay an additional $421 in city property taxes per year. It would generate about $175 million in additional revenue for the city.
While Thursday's vote established a maximum tax rate, council members can still adopt a lower rate during the remaining budget negotiations. That final tax rate will be adopted along with the final budget in a series of meetings scheduled to begin on August 13.