Proposition I – Required outside audits before any tax rate election
Proposition I would add a section to the City Charter requiring what it calls an “Independent Affordability and Efficiency Initiative”: an outside consultant’s review of how efficiently the city spends money. It got on the ballot through a petition organized by Save Austin Now, the political group that also led the 2021 petition to reinstate Austin’s camping ban.
As reported by KXAN, KVUE, CBS Austin and the Statesman, the amendment would:
- Have the City Auditor competitively hire an outside contractor within 120 days of the election
- Require the first review to be done within a year of hiring the contractor, and another at least every five years after that
- Cover every city department, including Austin Energy and Austin Water
- Require the contractor to commit to finding yearly and multi-year savings that add up to more than its own fee
- Bar the city from holding a tax rate election unless a review was completed within the year before it
The full text is in the petition and the city’s election ordinance.
Background: Prop Q
Last November, Austin voters rejected Proposition Q, a property tax rate increase the City Council asked for to cover a budget shortfall. It would have raised the city’s tax rate from about 47.8 cents to 57.4 cents per $100 of property value, bringing in roughly $110 million for homelessness services, parks and public safety. It failed by about 63% to 37% (Community Impact, Axios).
What Austin already does
- An annual outside financial audit. The charter already requires an independent CPA firm to audit the city’s books every year.
- The Office of the City Auditor. It answers to the council, not the City Manager, and has published hard-hitting reports this year, including one finding the city couldn’t justify hundreds of millions in consultant spending.
- A citywide efficiency review already under way. After voters rejected Prop Q last November, the council passed an ordinance in February requiring recurring outside efficiency reviews. In August it approved a contract with Public Works LLC, chosen from 25 bidders, for about $5.2 million over three years (Community Impact). The first year covers 20 departments.
The case for
Save Austin Now’s strongest argument is durability. An ordinance can be changed or repealed by the council. A charter amendment can only be changed by voters. Tying tax increases to a recent outside review also isn’t a fringe idea: Texas already requires school districts to complete an efficiency audit before asking voters for a tax rate increase.
After voters rejected Prop Q by roughly 27 points, it’s understandable that people want proof the city is spending well before it asks for more.
Why we’re voting no
It duplicates work that is already paid for. City Auditor Jason Hadavi told CBS Austin that the one-year deadline is “too tight to achieve meaningful results” and that the city would likely need a new contract: “I believe we would have to find someone else.” That means paying for two overlapping reviews.
It pays the auditor to find cuts. Requiring the contractor to identify more savings than it charges gives the reviewer a financial reason to recommend cuts, whether or not they’re the right call. An efficiency review is supposed to be neutral.
It puts a lock on tax rate elections, with a loose key. State law already caps how much Austin can raise property taxes without a vote. Prop I adds another condition before the city can even ask voters. The amendment doesn’t define when a review counts as “completed,” and state deadlines for calling a tax rate election fall in August. That gives anyone who wants to block a future tax election a lawsuit to file, and nobody can say yet whether a court would enforce it.
Nobody knows what it costs. There is no official estimate. The City Auditor’s office said it can’t estimate the cost because nothing like it has been done before (KXAN). Opponents’ figures of $5–20 million per review are not backed up with any published math, so we’re not repeating them as fact.
It’s organized by and benefits millionaires and billionaires who want to exert control over city processes. Save Austin Now’s campaign runs on a small number of very large checks, including several individual contributions of $25,000 or more (Transparency USA; filings are on the City Clerk’s site).
We’ve seen this before
In 2018 voters rejected Proposition K, a petition that required a one-time outside efficiency study, by about 58% to 42% (KUT). Prop I is broader: it’s permanent, it repeats, and it’s tied to tax elections.
Austin should keep auditing itself, and it is. Voters can hold the council accountable for that work at the ballot box and in every tax rate election. Writing a contractor mandate into the charter that can block those elections is the wrong tool.
Recommendation: No