"A tax increase of 6.25 cents spread out over five years would support repayment of the bonds and notes, if approved and issued, resulting in a projected estimated tax bill increase of $217 in 2020 on a home currently valued at $200,000.
Roger Baker, from Rag Blog, posted an comment in regards to the release of this info, that voters should read to inform themselves. Click read more for his comment.
Note this last section below. What they avoid saying here is that according to state law the city could legally go further in debt than now.
But this is not the issue. If you go back and watch the Council video with Elaine Hart talking to the council about the city bonding capacity, you hear her saying that there was no new capacity without raising the tax rate, and the most they could possibly issue while keeping Austin's triple A credit rating is a billion dollars, and then there would be no new capacity for about a decade.
In other words a billion in new debt would not use up the city's bonding capacity -- if we don't mind going to high interest junk bonds.
The video to watch is Asst. Austin Financial services Director Greg Canally speaking from 17-32 minutes in this video clip, at the end of which Elaine Hart chimes in and says the Austin debt burden would be quite high with six cents added: Open this clip, then open item D, on General Obligation bonds.
Hart admits the property tax rate would be rather high after borrowing the billion. This action assumes that the current Austin property values will keep increasing. Everything can work out, if we assume a long term continuation of the current Austin growth boom keeping property values and property taxes rising year after year. Could this continual rise in property values be a risky assumption that pledges our homes as collateral?
~Roger Baker, Rag Blog