Save the drama for the budget amendments.
Mayor Sylvester Turner
A few months into the COVID-19 pandemic, Mayor Sylvester Turner painted a dire picture of the city’s finances as he laid out his plan to balance last year’s $5 billion city budget.
Like other cities across the country, Houston’s sales tax revenue had plunged as the public stayed home, and Turner was proposing to make up the loss by furloughing 3,000 municipal workers, deferring police cadet classes, cutting the library budget and draining the city’s emergency reserves.
“These are financially difficult times, and it’s simply unavoidable,” Turner said of the cuts.
One year later, the city is emerging from the worst of the pandemic with its finances largely unscathed. Thanks to a payout of more than $1 billion in federal aid, Turner and city finance officials avoided the projected furloughs, reinstated the police cadet classes and are heading into the next fiscal year with replenished emergency reserves and a rare budget surplus.
Still, as City Council prepares to consider Turner’s $5.1 billion annual spending plan Wednesday, not everyone agrees on how the city should use its newfound wealth. Since prior mayoral administrations, city officials have passed annual budgets that spend more than the city takes in through recurring revenue, such as taxes. They have made up the difference by selling city-owned land, deferring hundreds of millions of dollars in maintenance on city buildings, dipping into cash reserves and using other one-time fixes. Turner has attributed much of the budgetary struggles to the city’s revenue cap, which limits annual growth in property tax revenue to 4.5 percent or the combined rates of inflation and population, whichever is lower.
City Controller Chris Brown and a number of council members have urged the mayor to use the relief money to address the long-standing budget issues, warning that added costs will leave the city in a precarious position when the federal money runs out. Eventually, the thinking goes, the city will run out of land to sell, while city infrastructure will continue to deteriorate and demand for city services will keep rising faster than the revenue used to fund them.
“The challenge is when that money runs out, if we add too many of the wrong things, i.e. recurring expenditures, it’s only going to exacerbate this structural imbalance in the future and make it that much worse,” Brown said.
Houston received a $304 million haul this year from the federal stimulus package approved by Congress in March, and it is set to receive the same amount in 2022, on top of a $400 million allotment it received last year from the first round of COVID aid. Turner is asking city council on Wednesday to approve a spending plan that uses $188 million of the aid to close most of the city’s projected budget deficit, and a chunk of the remaining funds to increase pay for Houston firefighters by 6 percent when the new fiscal year begins July 1.
See here for the previous entry. I tend to lean towards what Controller Brown is saying, but we’ll see what the details of this budget are, and go from there. I know that my calls to trim the police budget while we still can went unheeded, but I’d welcome an amendment to that effect from one or more Council members. We have two years to make good use of these federal funds. Let’s do what we can to get the most out of them and put the city on a stronger financial footing going forward.
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