City Council continues to be remarkably tone deaf on the issue of tax breaks for historic landmarks. Council wants to tinker with the structure of the tax breaks. But what people are mad about is Council's bad judgment in handing out tax breaks, not necessarily the structure. The average Austinite does not believe that preserving a mansion once owned by the the proprietor of Austin's first cash-only building materials business is worth the loss of $34,772 in annual tax revenue for the city, county and school district. Capping the maximum (city) tax deduction at $2,000 or $2,500 does not cure bad judgment. Nor does requiring the beneficiaries to fill out a form every year justifying the tax deductions.
I personally do have a problem with the program's structure that cannot be fixed by mere tinkering. August Harris, vice president of the Heritage Society of Austin, is correct that tying tax breaks to renovation costs doesn't take into account the development rights that owners give up. These can be quite valuable. But they aren't that valuable to the owner of a stately West Austin mansion whose home is approximately the best and highest use of the property. They are valuable to the East Austin owner who is forced to preserve a small, creaky structure. Compensating homeowners through tax breaks over-compensates the first and under-compensates the second. It would be more sensible, and more progressive, to collect taxes from everyone and make straight cash payments to owners based on the actual burden imposed by the landmark designation.