Houston City Council voted to provide property tax relief to seniors Wednesday, one of many votes at a marathon meeting at which council unanimously approved a $4.5 billion budget for the fiscal year that starts July 1.
The city’s exemption for homeowners 65 and older will rise from $70,862 to $80,000 thanks to the 14-2 vote, a move that should be codified with a second approval next week, City Attorney David Feldman said.
The roller-coaster 10-hour meeting – all but 45 minutes of which focused on Mayor Annise Parker’s budget and council members’ 60 proposed amendments to it – will require Parker to shuffle about $3.9 million in the $2.2 billion general fund budget. The rest of the city’s spending occurs in enterprise funds fed by fees and not taxes.
Among the successful amendments: A $2 million push to redeploy four ambulances shelved during the cutbacks; a $1.5 million summer jobs program for youth; $250,000 for cameras to monitor illegal dumping; and money to increase the Houston Center for Literacy’s budget from $400,000 to $500,000. Other big-ticket items, including a $3 million summer-jobs program and $1.5 million for after-school programs, were voted down.
Parker said she will cover the ambulance spending with funds that had been set aside to analyze the fire department’s operations and will fund the jobs program with money that had been slated for efficiency reviews of departments. Parker said she will shuffle $250,000 around in the police budget to cover the cameras and must find an offset for the literacy item.
The $3.8 million cost of raising property tax exemptions, which will save the average homeowner $39 to $58, depending on the estimate, won’t require a change to the budget, Parker said. City officials expect revenues to exceed the projected figures, with or without exemption changes.
“We can always say that we have to prepare for tomorrow, but there are senior citizens out there now who, $40, $50 dollars a year would help them pay the drainage fee, help them pay their water bill, maybe medication,” said the amendment’s author, Councilman C.O. Bradford. “Do all of them need it? Perhaps not, but, by God, I can take you to enough neighborhoods in Houston where they are on fixed incomes and to provide relief for them is the proper thing to do.”
I’m sure this will help some people who need it, and raising the exemption is more progressive than cutting the rate, but this is a fairly significant amount of money. It’s a lot less than it could have been, since some Council members proposed raising the exemption to $160,000 to match Harris County. That would have cost a boatload, on the order of $20 million a year. I note that one person who proposed that massive reduction in revenue was CM Helena Brown, who is convinced that the city is on the brink of bankruptcy. You tell me how that makes sense.
If you want to wonk out on the budget, go look at the Fiscal Year 2014 Proposed Budget webpage and the Budget and Fiscal Affairs Committee webpage, which together have enough PDFs to keep you busy for weeks. The Houston Politics blog had multiple posts over the past couple of weeks covering the individual departments’ budget presentations. Very useful stuff, too bad it wasn’t ever in the print edition or the houstonchronicle.com site.
One more thing:
With an $81 million deficit projected for the next budget cycle, Parker said the most important amendment of the day likely was the first, in which council voted 13-3 to accept Councilman Oliver Pennington’s plan to save any revenue collected over expected levels. That meant no such money could be spent during the fiscal year, including on projects such as those mentioned in the scores of subsequent budget amendments.
That’s not a lot to go on. An email from CM Costello at the start of the budget committee process gives a little bit of information on this:
Finance Director Kelly Dowe followed the Controller with the Administration’s FY 2014 budget overview and General Fund five-year forecast. The FY 2014 budget shows increases in property tax revenue of 4.33 percent and sales tax revenue of 5.8 percent. Total General Fund revenues are projected to grow $70.3 million and General Fund expenditures budgeted to increase $105 million. This will be the tenth year the city has spent more money than it has collected. The majority of expenditure increases ($53.7 million) are tied to personnel: contractual pay increases ($21.5 million); higher health benefit costs ($7.3 million); and increased pension costs ($23 million). Other specifics include $7.5 million for ongoing maintenance of the city’s facilities and fleet, $3.1 million to restore library hours and personnel, $2 million for an analysis aimed at optimizing the city’s fire and emergency services model and $2.7 million in debt service increases. The proposed budget also expands single stream recycling to another 100,000 households.
That’s based on the five year forecast that Finance Director Kelly Dowe makes. You can see the rest of Dowe’s materials here. I’ll simply note that while any projection of a deficit is concerning, the revenue projections for each of the past three years undershot the actual totals. Things could be better than we think, or if the economy goes to hell again they could be worse. We just don’t know. Predicting the future is hard, y’all. Stace has more.