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Austin's $15,000 Budget Crisis Threatens Tax Hikes

Monday, June 4, 1888 regular

Severe budget shortfall: Mayor Joseph Nalle warned the council that Austin faces a projected $10,000-$15,000 deficit by the end of the fiscal year (November 1888), with expenses at $59,441.50 versus available revenues of only $48,112.69. He blamed repeated council rejection of cost-cutting measures and urged immediate expense reductions.

Growing debt burden: The city carried $135,000 in bonded debt from previous years, consuming $10,000 annually in interest payments (one-eighth of total revenues) with "nothing to show in return." The Mayor criticized the council for violating the city charter, which explicitly prohibits creating debt beyond revenues.

Street lighting expansion: Despite financial troubles, the council approved plans to install 25 arc lights and 100 incandescent lights throughout Austin's wards, though debate erupted over fair distribution among neighborhoods.

Cost-cutting measures passed: The council reduced fire department driver and hostler salaries from $600 to $480 annually, cut the police force, and eliminated the City Secretary position to help address the budget crisis.

Revenue challenges: Only $37,139.69 of property taxes had been collected from the current year, and the mayor cautioned that the deficit estimate assumes full tax collection—an unlikely scenario.

Full Transcript

370 The Minutes of a Regular Meeting of the City Council. Austin, Tex. June 04, 1888. "Hon. Joseph Nalle, presiding. Roll Call. Present Aldermen Hossmann, Boland, Brush, Campbell, J.C. Gross, Fisher, Graham, Haigler, Jones, Linn, Odell, Phillips, Platt, Schneider, Townsend, Wilson, Wortham = 17. Absent - Aldermen Caldwell, Metz, Pillow = 3. The minutes of the last two meetings of the City Council were adopted as printed. Mrs M.J. Mark Alderman Wortham introduced a Communication relative to taxes erroneously assessed against Mrs. Mary J. Markle. Referred to Finance Committee. Marshal. The Marshal's report for the month of May was presented. It Shows: Total amount of fines and Costs assessed in the Recorder's Court $1024.05 Collected in Cash $379.00 Marked out 41.10 Escaped 32.25 Appealed 18.80 Remitted 49.10 Carried forward 115.80 - $1024.05 Pound fees Collected $8.50 Back fines " 12.10 Total number of arrests 93. Referred to police Committee Phys. Report of the City Physician for the month of May 1888, was next presented. It Shows: Patients in hospital May 1 13 " Admitted to " " 9 " discharged from " " " 13 " died in " " " 1 " Remaining " June 1 8 One Case of diphtheria reported Visits made 154 Prescriptions Written 230 Referred to hospital Committee Sexton Report of the City Sexton for the month of May, 1888, Was next introduced and shows that there were - --- Page break --- 371 28 deaths, 18 of whom were white and ten Colored. Referred to Cemetery Committee. Clerk. Report of the City Clerk of Warrants issued during the month of May, 1888, was introduced and referred to the finance Committee. It places the amount issued at $7197.51 Jr. Report of the City Treasurer from May 21 to June 11, 1888, was presented. It shows: Balances on hand May 21 $11,780.48 Receipts $4,198.25 Total $15,978.73 Disbursements 4,522.80 Balances June 11: Acct of general fund 10.868.47 " " City Cemetery 392.23 " " Back debt 170.23 " " Interest 25.00 $15,978.73 Referred to finance Committee. Mayor's The Mayor presented to the Council the Message– following message: Finances To the Honorable Board of Aldermen: Gentlemen– I deem it proper to submit a statement to you giving in brief, the financial condition of the City, together with an estimate of the necessary expenditures for the remainder of the present fiscal year and the probable revenues from all sources that we may rely upon to meet these expenditures. It is not necessary for me to enter into any lengthy disquisition, or establish facts that speak for themselves. I submit the figures; it is for you to determine the policy. I have heretofore submitted to you my Views, embraced in certain recommendations looking to a curtailment of the general expense, confidently anticipating your support. These recommendations I hoped to supplement with others, looking to further reduction of all expense and a more economical admin- istration of the public affairs. --- Page break --- But inasmuch as these recommendations have so repeatedly failed to meet with your approval, I deem it useless to further encroach upon your time and patience, and therefore, I content myself with a submittal of the figures. I would leave to you the work and responsibility of suggesting and carrying out such measures as will maintain the Credit of the City, without calling upon the people at the end of the fiscal year to provide for the payment of a deficiency of $13,000 or $15,000. There is yet due and Collectable from tax rolls of the present year, the sum of $37,139.69. To this amount may be added, approximately the following sums: From License Tax $5,500.00 " Travis C. acct Hospital Fund 1,000.00 " Receivers Court 1,200.00 " Back Taxes, 1886 1,300.00 " Miscellaneous Sources 400.00 Total $9,600.00 (Showing the aggregate amount due and available from all sources, provided the entire ad Valorem Tax is Collected, together with $12,173 now in the hands of the Treasurer, to $48,112.69, to run the government for the remainder of the fiscal year, closing November 30, 1888. The absolute amount necessary to meet the Current expenses and demands upon the government for the same period upon its present basis is as follows: To meet unpaid Claims against the City $4,129.18 Feeding prisoners (approximately) 700.00 " teams 980.00 For fencing Pleasure Park 300.00 For fire Companies 1,750.00 Rent, Washington J.O. Co's house 350.00 Expenses, hospital, exclusive pay roll 1,120.00 Regular monthly pay roll 24,934.00 Warrants undelivered 369.65 Water rent, due July 1, 1888 6,000.00 Interest on bonded debt, due July 1, 1888. 5,700.00 --- Page break --- 373 Rent for fire alarm 600.00 Street lighting 3,500.00 Rent for mayor's office 175.00 Water rent, July 1 to Dec. 1, 1888. 5,000.00 Interest on bonded debt, July 1, to Dec. 1, 1888. 4,333.67 Total $59,441.50 The difference between these two amounts – $59,441.50 and $48,912.69 – shows the deficit that we shall be Called upon to meet, unless steps are taken at once, to materially reduce the present expenses. This difference shows a balance against the City of $10,528.81, while it should be remembered that the estimate is based upon the premises that every dollar of the ad Valorem tax will be Collected. This, I take it, will hardly be the Case; but whatever the discrepancy between the amount due and the amount Collected, it will only serve to increase the deficiency. Again, this estimate does not set aside any fund for miscellaneous or Contingent expenses, Certain to arise, and which Can hardly fail to swell the aggregate expenditures to $60,000 or more. I think it not a violent prediction to place the deficiency, at the end of the present fiscal year, unless a Curtailment of expenses is immediately adopted, at $15,000. It should be understood, however, that this includes a deficiency of nearly $20,000, which was brought over from last year. It has been my purpose, as far as in my power, to administer the government efficiently and economically, but I am powerless to effect desired reforms without the aid and support of the board of Aldermen. I had hoped that I would be enabled to make an innovation upon the time-honored rule of leaving a deficiency for my successor to provide for, and which, as had heretofore been the Case, the people would be Called upon to meet through the issuance of another series of bonds. --- Page break --- Our bonded indebtedness, aggregating $135,000, and drawing from the tax payers, annually the sum of $10,000 for the payment of interest, was created safely and entirely through the issuance, at stated periods, of necessary amounts to redeem the obligations which should have never been [illegible] and which the Charter of the City expressly and specifically inhibits. That Charter says, in plain and unmistakable terms, that no debt shall be created by the Council in excess of the revenues, yet today the tax payers of Austin are saddled with a bonded indebt edness of $135,000, drawing an annual interest equal to one-eighth the entire revenues of the City, with nothing to show in return for the debt. And they are today, unless an immediate halt is called, threatened with a still further augmentation of it at the end of the present year. I have before alluded to the subject, and again take occasion to revert to it. Under the present policy, the tax payers have no protection against a reckless and wasteful expenditure of the moneys paid by them for an honest and economical administration of public affairs. It is true, the Charter inhibits the Council from creating or contracting debts in excess of the revenues, but no no penalty is attached for violation, it is virtually ignored. All will concede that some check should be placed upon this unlawful assumption of power to Create debts against the City in excess of the revenues, but I see no relief unless the people take the matter in hand, and secure from the legisla ture an amendment to the Charter, provising a heavy and direct penalty for the violation by the mayor or any or all members of the Board --- Page break --- 375 of Aldermen, of that Clause which presoribes that no liabilities shall be incurred in excess of the Revenues. With such a Clause in the organic law, I feel safe to say that there would be no unnecessary delays in bringing about needed reforms and retrenchment in public expenditures. I deem that I have done my duty in calling the attention of this Board to the breakers ahead, and suggesting such Curtailment and reductions as will in a great measure prevent the threatened disaster of a large deficit. Upon this branch of the local government must rest the responsibility for the results. Reductions aggregating nearly if not quite $10,000 I hold can be made without impairment to the successful administration of the city's affairs. It is with you, gentlemen of the Board of Aldermen, to say what "Policy shall prevail - whether we shall "Continue as at present, and carry over to the next year a large deficit, in violation of the letter and spirit of the Charter, or cut down expenses to the lowest possible point, and thereby bring them within the limits of our revenues. Whatever your decision, those who pay the taxes - will bear the burden of governmenttwice to the judges of your action. Respectfully, Joseph Nalle. Mayor. Austin, May 29, 1888. After the message was read, Alderman Platt moved that 500 copies of it be printed in the minutes, for distribution. Alderman Fisher moved that it be printed in the two daily papers of the city - in the Dispatch at its contract price with the City, and in the Statesman on the best terms to be obtained by the printing Committee. --- Page break --- 376 ) Alderman Linn moved to refer the message to a Special Committee of five. Alderman Caldwell entered and announced his name. The motion made by Alderman Fisher then prevailed. Alderman Schneider, Chairman of the Special Committee to locate electric Arc lights, presented a majority report from the Committee, as follows: Hon. Joseph Nalle, Mayor: Your Committee to whom was referred the locating of, twenty five Arc and one hundred Incandescent lights, beg leave to report as follows: Section 1. The twenty five Arc lights we have located as follows: 1. One light Center of Congress Avenue and Second (Live Oak) Street. 2. One light " " " " "Fourth (Cedar) " 3. " " " " " " " "Sixth (Pecan) " 4. " " " " " " " "Ninth (Ash) " 5. " " " " " " " "Eleventh (Mesquite) " 6. " " " " " " " "Sixteenth (Cherry) " 7. " " " " " "Sixth (Pecan) Street and Bowie Street 8. " " " " " " " "Rio Grande " 9. " " " " " " " "Guadalupe " 10. " " " " " " " "San Jacinto " 11. " " " " " " " "Neches " 12. " " " " " " " "East Avenue " 13. " " " " " " " "Second (Live Oak) " 14. " " " " " " " "Fourth (Cedar) " 15. " " " " " " " "Second (Live Oak) " 16. " " " " " "Trinity " " "Sixth (Mulberry) " 17. " " " " " "Red River " " "Eleventh (Mesquite) " 18. " " " " " "Brazos " " "Tenth (Mulberry) " 19. " " " " " "Sabine " " "Thirteenth (College Avenue) " 20. " " " " " "Rio Grande " " "Fourteenth (Peach) " 21. " " " " " "Lavaca " " "Sixteenth (Cherry) " 22. " " " " " "Sabine " " "Seventeenth (Linden) " 23. " " " " " "Lavaca " " "Twenty-first (Elm) " 24. " " " " " "Guadalupe " " "Fourth (Orange) " 25. " " " " " " " " " " " " " " Sec. 2. The one hundred Incandescent lights, --- Page break --- 377 agreed to the forthcoming distribution for each Ward, and to let the aldermen of the respective Wards locate the same. First Ward, 8 lights Second " 7 " Third " 7 " Fourth " 7 " Fifth " 8 " 6th " 13 " 7th " 14 " 8th " 13 " 9th " 10 " 10th " 13 " Respectfully, Etc. J.H. Schneider, J.B. F. Fillon, W.B. Warthan, George F. Assmann, Mike Boland, Jno. F. Phillips, J.G. Jones. Alderman Wissom, of the last named Committee, presented a minority report, as follows: Austin, Texas, June 14, 1888. To the Hon. Mayor and Board of Aldermen: ---We, the undersigned members of your special Committee, app- ointed to apportion and locate the new and incandescent lights throughout the city, respectfully beg leave to submit this, our, minority report, in the hopes that Justice may be done the Wards which we have the honor to represent. Your attention is invited in the first place to the official vote cast at the last municipal election, showing the voting population of the Second, third, Fourth, fifth and Sixth Wards to be very nearly equal and a more equal distribution of the lights, should be made. We therefore recommend that the incandescent lights be distributed as follows: The first Ward 7 --- Page break --- 378 Lights, is and Ward 9 lights. Mind Ward 8 lights Fourth Ward 9 lights (fifth) Ward 9 lights. Sixth Ward 11 lights, Seventh Ward 14 lights. Eighth Ward 12 lights, Ninth Ward 9 lights and Tenth Ward 14 lights. Respectfully, J. M. Wilson A. H. Townsend, Geo. A. Brush, After the reports were read Alderman Linn moved to substitute the minority report for the majority report. Alderman Phillips moved to lay the motion on the table. Carried. By yeas - Aldermen Assmann, Boland De Gress, Graham, Haigler, Jones, Odell, Phillips, Platt, Schneider, Wortham -11. Nays- Aldermen Brush, Caldwell, Campbell, Fisher, Linn, Townsend, Wilson - 7. Alderman Phillips then moved to adopt the majority report of the Committee which prevailed by the following vote: Yeas - Aldermen Assmann, Boland, De Gress, Fisher, Graham, Haigler, Jones, Odell, Phillips, Platt, Schneider, Wortham- 12 Nays- Aldermen Brush, Caldwell, Campbell, Linn, Townsend, Wilson - 6. Alderman Phillips then moved to reconsider the vote by which the majority report of the Committee was adopted, and to lay that motion on the table. Carried. Ald. Caldwell Alderman Caldwell was excused 8 mins. Alderman De Gress introduced an Ordinance amending Section 16 of an Ordinance entitled An Ordinance, fixing the Comp- ensation of the officers and employees of the City of Austin from the date of their qualification, passed January 6, 1888. The object of the Ordinance is to reduce the Salaries of the drivers and hostlers in the fire department from $600 per annum to $480 per annum. After it was read, Alderman Linn moved to lay it on --- Page break --- 379 The table which was lost by the following vote; Yeas - Aldermen Campbell, Fisher, Linn, Schneider, Townsend - 5. Nays - Aldermen Assmann, Boland, Brush, DeGress, Graham, Haigler, Jones, Odell, Phillips, Platt, Wilson, Wortham - 12. A motion was then made to suspend the rules and place the Ordinance on its second reading, which prevailed by a two-thirds vote of a full board. The Ordinance was then read a second time, after which Alderman DeGress moved to amend by striking out June 1, and inserting June 10 as the date on which the Ordinance shall take effect. Alderman Campbell moved to amend by naming July 1 as the date on which it shall become a law. The amendment was accepted and adopted, after which a motion was made to suspend the rules, and place the Ordinance on its third reading, which prevailed by the following vote: Yeas - Aldermen Assmann, Boland, Brush, Campbell, DeGress, Fisher, Graham, Haigler, Jones, Odell, Phillips, Platt, Wilson, Wortham - 14. On motion, Aldermen Linn, Schneider, Townsend, and Phillips then passed. Alderman Phillips then presented an Ordinance amending article 181, title 5, Chapter 4, Revised Civil Ordinances. The object of this Ordinance - is to limit the term of office of the assistant assessor and Collector of taxes to six months in each year, salary when serving to be $75 per month, as at present. The ordinance was read, the first time, after which a motion was made to suspend the rules and place it on its second reading, which was rejected. Yeas - Aldermen Assmann, Boland, Brush, DeGress, Haigler, Jones, Odell, Phillips, Platt, Wilson, Wortham - 11. Nays - Aldermen Campbell, Fisher, Graham, Linn, Schneider, Townsend - 6. --- Page break --- 380 Alderman Brush introduced: An Ordinance to protect the Public Parks and Squares. Alderman Northam moved to lay it on the table until the next meeting of the Council. Carried. Alderman DeGress presented An Ordinance amending article 249, Chapter 1, title 13 of the Revised Civil Ordinances of the City of Austin. This Ordinance provides for reducing the police force. It was read first time, after which a motion was made to suspend the rules and place the Ordinance on its second reading which was adopted by a two-thirds vote of a full board, and as the ordinance was being read a second time, Alderman DeGress moved to insert after the words "Sergeant of Police" the words "and one detective". Carried. The rules were then suspended by a two-thirds vote of a full board and the Ordinance passed. City Secy. Alderman DeGress then introduced: An Ordinance repealing an Ordinance, entitled "An Ordinance Creating the office of City Secretary of the City of Austin", passed February 20, 1888. It was read first time, after which motions were made to suspend the rules and place the Ordinance on its second and third readings which were adopted by a two-thirds vote of a full board, and on motion it was passed. $1965.66. accts Alderman DeGress introduced: An Ordinance appropriating the sum of $1965.66 for the purpose of paying approved accounts. It was read first time, after which motions were made to suspend the rules and the Ordinance on its second and third readings and that it do pass, all of which prevailed by the following Vote: Yeas - Aldermen Assmann, Boland Brush, Campbell, DeGress, Fisher, Graham, Haigler, Jones, Linn, Odell, Phillips, Platt, Schneider, Townsend, Wilson, Wortham On motion the Council then adjourned. Milton Morris, City Clerk.