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Layoffs are coming

It’s gonna suck, though hopefully not as hard as last time.

Mayor Sylvester Turner

Mayor Sylvester Turner

Mayor Sylvester Turner said Wednesday that a still undetermined number of city employees will be laid off in the coming months, making his first formal acknowledgment that Houston’s projected $126 million budget gap can’t be closed by July without personnel reductions.

Though Turner did not provide an estimate of the number of employees at risk, personnel costs comprise more than 63 percent of the city’s general fund operating budget. Because another 19 percent of that money is set aside for debt payments, spending cuts need not go deep before they touch workers.

“It’s going to be very difficult to balance the budget at the end of June without some layoffs,” Turner said. “The question will be, how many there will be. I’ve taken no departments off the table. The only thing I will not do is I will not lay off a police officer.”

[…]

Noting that job cuts inherently mean cuts to city services, Turner sought to assure that his efforts to seek concessions from the leaders of the city’s economic development zones, pension boards and other groups are progressing well. He said he also is examining other ways to cut costs, such as restructuring the city’s debt.

Never missing a chance to repeat the refrain first issued in his inaugural address last month, Turner stressed that he also has asked City Council members to join in this “shared sacrifice.”

Beginning Tuesday and continuing at Wednesday’s council meeting, Turner hand-delivered letters to the 11 district council members. The notes, which he jokingly dubbed “Valentine’s cards,” told the council members he seeks to cut funds they use to support projects in their districts from $1 million to $250,000 in the upcoming budget, saving more than $8 million, in part, to avert additional layoffs.

“My hope is that we can put forth a budget that minimizes the number of layoffs, and that’s why I’ve asked everyone to engage in shared sacrifice,” Turner said. “It’s very difficult to tell people that they’re going to be laid off if we hold on to everything that we have.”

Mayor Turner has already asked Council to clip their discretionary budgets, because a little bit here and a little bit there may make the big pain a little smaller. I assume “economic development zones” means TIRZes, so I’ll be interested to see what that entails, and if the usual suspects start screaming bloody murder about the stupid revenue cap. If Turner can negotiate a minimal cost of living increase for the firefighters’ pension and/or a larger contribution from them as was the case with last year’s pension deal, that’s all to the good as well. We can’t do anything about the revenue cap now, but it will be on the horizon. If the general consensus is that Turner has done what he can to control spending (even though that has nothing to do with the rev cap), that may make it a little easier to get a revision to the cap passed. For now, anything that can be done to minimize job losses will be appreciated. I don’t envy him the task.

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14 Comments

  1. Steve Houston says:

    I believe previous comments from the Mayor have indicated he is letting many open positions go unfilled to save some cuts, he is cutting the slush funds, and he has a few experts looking at apportioning certain costs to the TIRZ program and a few of the Enterprise funds. I have it on good authority that he is getting cooperation from employee groups regarding some initial concessions and will delay a few things past the mid year point to save additional funds. That won’t be enough to avoid all layoffs but considering he is barely in office, he’s making much more progress than some believed he would.

    It should be noted that if he lays off civilian employees working at HPD, it will again result in using classified officers in clerical roles, a huge waste of money that would have the same impact as laying off officers but he has been made aware of that folly. A few on the command staff of HFD and HPD have made some (independent) suggestions for flexible use of resources to save money but they have yet to be vetted in detail.

  2. Sales tax has been declining nation wide for months and/or years.

    We cannot continue comparing public services to consumer goods, like kitchen appliances.
    We cannot export city employees to to china to lower city costs.

    We DO NOT have a spending problem, we have a corporate hand out problem via TIRZ and the revenue cap.

    We can either have slightly higher property taxes, or we can have an income tax.
    You choose.

    No other city in the US has a revenue cap.

    If voters that own a $200k home aren’t willing to pay $13 extra per home, per year.
    We have bigger problems.

    Paul Bettencourt only thinks of his short term political gains when he supported the revenue cap.

    The Harris County TAC should no longer be handled by houston republicans.
    They gave us the bureaucratic revenue cap and blocked online voter registration.

    The writing is on the wall

    And of course michael kubosh, amanda edwards and others aren’t going to stick their necks out to tell voters the truth.
    Because they want to get relected in 2019.

  3. Joel says:

    some Democrat.

  4. Joshua ben bullard says:

    Since taxi business has decreased by 41%,can we layoff the 5 additional taxi cab inspectors that mayor parker hired 30/days before she left?????

  5. It has nothing to do with being a democrat.

    There are many moving parts

    Do your research.

  6. Steve Houston says:

    Joe, sales taxes had been INCREASING or remaining steady until a few months ago, hence the comment in recent articles/reports that point out sales taxes declined for the last three months locally. For consumers, oil price declines are generally great news as they pay half to a third of what they were paying not long ago. The exception is if you work in the oil industry that still refuses to plan ahead during boom times, and those who depend on that industry.

    So while I agree that we ALSO have a corporate welfare problem, many companies coming to expect that a city or county will give huge tax breaks to get a company to move somewhere, and the TIRZ program artificially keeping money out of general fund coffers while usually landing in some developer’s back pocket, there are also examples of the city refusing to spend on core services in favor of frills. Charles has asked a number of times in the past what I (and others) consider “a frill”, and I have repeatedly answered him, but of course not everyone agrees. Parker and council knew of the pending deficit for several years now so it is nothing new but she insisted on restaffing previously cut positions, adding to corporate and social welfare programs, and refused to budge an inch on other expenses that the city DOES have control over.

    And whatever your stance on a revenue cap, the fact is that it exists and must therefore be taken into account in balancing the budget. There are unintended consequences that some on the far right refuse to acknowledge (big surprise there, right?), but it is just like term limits; the biggest supports for the city having them coming from county residents who won’t extend the policy to county representatives or state office holders. If they thought it through, term limits is a huge driver of the under funding issue since the bureaucracy can simply wait out an office holder who will kick the can down the road.

    What I find extremely interesting is that the loudest of the tea party and right wing folks, most living in the county, continue the “Detroit” assertion how people are going to run away to the county to spare themselves from the pending tax increases the city will have to engage in. They’ve been saying it for years and all it takes is a simple little comparison to find it’s not true. Once you add in the cost of all those services the county doesn’t provide, street lights, water & sewer via MUDs, reasonable levels of policing (via HOA contracts in the county), Garbage pick up, and others; any savings go up in smoke in most cases. You also get to add those wonderful hours in commuter traffic both ways, thankfully gas prices lower now.

    Our new mayor is cutting here and there, negotiating as able, and scrutinizing contracts and practices as able but the upcoming deficit is only part of the equation. To be truly successful, he’s going to have to address the bigger picture stuff too and that will cost more than the $13 a year per household you speak of, the compounding effect of owed pension debt not going to matter if new hires in all three areas of the city (municipal, fore and cops) get some minimal retirement benefit. Those who prematurely declare city bankruptcy have been foolishly doing so for the better part of 20 years, the issue not as immediate as believed but something has to be done before it gets that far.

  7. Steve

    Sales tax have been going down for some time in Houston, state wide and nation wide.

    http://comptroller.texas.gov/taxinfo/allocsum/cities.html

    For many different reasons.
    This is just one of many sources, If you have other sources that say otherwise please post them.

    The only real solutions(s) are, in this order:
    Repeal Revenue Cap
    Reform TIRZ
    Create Municipal Public Bank
    Close commercial real estate loopholes.

    I believe if we do these things, taxes will not increase or we’ll incrase modestly.
    We’ll be able to provide city services.

    I’ll tell you like i told the firefighters and HOPE.
    Any pension reform that may be needed shoould be offset with Paid FMLA, I’ve already done a rough finance of this and it could be done via a payroll insurance scheme at no cost to taxpayers.

    Any tax breaks that need to be provided whether through 380/381 agreements or abatements need to be thoroughly analyzed.

    Tax breaks for super markets do not solve food deserts.

  8. Steve Houston says:

    Joe, using the very same website (which is the best for providing historical data in one place), try looking again using the Quarterly Sales Tax Report’s via the city of Houston for “all industries”. It will show that other than the expected dip during the market crash some year’s back, sales tax revenues have INCREASED in virtually every year except just recently, the recent reports showing a ~ 5+% decline for the last quarter. As we are talking about the city of Houston’s finances, those are the numbers most pertinent, other communities also having increases in that time.

    Otherwise, there is about as much chance of the state instituting a state wide income tax as there is of Kuff being appointed in charge of the state pension board, as much chance of your pet project “public bank” as there is of big oil giving up to go green, and of ending corporate welfare of various sorts as there is you and I ballroom dancing on PBS. While any of these things could theoretically happen, they are not overly likely. I favor closing commercial tax loopholes and reforming the TIRZ program much more than you do and I’ve been in favor of it back when they were first being proposed (back then, the impetus was not to skirt the revenue cap as there wasn’t one). And having some expertise not only with the finances behind FMLA but the actual practice of how it works under lax city rules, adding such a program would be a costly disaster as employees would jump on the program like crazy to get something for nothing.

    So as I have repeatedly mentioned, it’d be nice to fix these areas but we’re going to have to settle for marginal improvements if any at all because those who profit from them are knee deep in owning politicians in a manner the ultra right wing wackos seem to think public sector employee groups do now (which of course they do not).

  9. Thanks

    I misread on my phone.

  10. Paid FMLA abuse is minimal or non existent.
    3-4 states have had it on the books for the private sector for years now.
    The city of atlanta has paid fmla, as does the city of austin, etc etc

    Anyone that doesn’t support paid fmla whether in the public or private sector, are idiots.
    It would be financed via a payroll insurance plan at no cost to taxpayers.
    It’s all on my website

    A municipal public bank is one of many solutions.
    It’s a real solution.
    If city council wants to play the dog and pony show, fine.
    They can keep their pet projects.

    Still waiting for Kubosh to put together his 4 year plan for houston.
    *crickets*

  11. “While most of the big cities were up compared to their 2015 totals, Houston’s collections were down 7.5 percent, a sixth straight month of year-over-year decline.” http://www.houstonchronicle.com/business/economy/article/Region-braces-for-impact-of-declining-sales-tax-6822102.php

  12. Steve Houston says:

    Joe, my experience in FMLA abuse was very real and in the public sector. It required employees to burn their own sick or vacation time, many of them doing so until they were completely out of time and even then a number of them admitting off the record that it was so they could take off when they wanted to do other things despite staffing crunches. If you give them another time bank from which to burn time, a significant portion will do so because they can, not only when they truly need it, based on human nature. So belittle me as an “idiot” in a childish fashion that only discredits you, but city of Houston policies related to the practice already create substantial overtime and related problems, add in the notion that “it’s a benefit that is earned or paid for” so people feel the belief to use it as they see fit on a broad scale and you might as well close the doors on a major event day. So as soon as you require employees to pay for it via a cost, they will consider it fruit for the picking as a perk to be used and the law of unintended consequences will kick in.

    As far as Sales tax revenues are concerned, you mentioned that they were in decline for “years”. My point was that other than a single catastrophic year, sales tax revenue had increased for every other year until recently. The article points out how Fort Worth and Dallas actually increased collections and “collections across the state were down a little below 1 percent”, certainly not enough to merit changing to an income tax based system that would also be impacted by oil plunging so low. Again, that makes for two years out of 30 where sales tax revenues declined.

    But as far as the public bank matter, other than the fact that most everything the city touches seems to need a graft component to get passed, or the fact that banking is not a core competency of the city, how exactly do you think that is going to help city finances? Any bureaucracy needed to establish the city as a lender will absorb any potential profits just as the predicted social fairness component would likely result in the scheme costing the city money.

  13. If employees are burning other paid leave then there are other issues to address.

    Other states, cities, counties and private sector have implemented paid fmla.

    Oh, and other countries have had paid fmla for decades.

    Maybe i missed something… Or not.

    Paid fmla is a no brainer.
    I shouldn’t have to spell it out.
    But judging by the previous city council races and the 150 state rep races, i might have to.

    Public banking would only be used to finance public safety and infrastructure.
    Maybe folks missed my kpft interview, haven’t read santa fe’s feasibility study, haven’t heard of north dakota state bank or that roughly 1 in 4 banks internationally are publicly owned.

    public banking would allow us to get rid of tirz, revenue cap and rebuild houston.
    Weren’t those mostly republican ideas?

    You should run for city council.

  14. Steve Houston says:

    Joe, I’d be as lousy a choice for council as many others but I suppose I just think you should spell it out because the last time I looked at your website, you applied no critical thought to any of the topics, merely listed and linked some of them to other places. That is not a “platform” so much as a laundry list of possible ideas to pursue, some of them really great ideas but lacking a specific analysis of why they would be a better choice for Houston over another community always what I looked for. So while SOME other places have a variation of paid FMLA, the entire country covered by the basic idea via federal law, the hurdle to convince me has to surpass my first hand experiences with FMLA abuse in the ccity limits of Houston. If you laid out the basics to most employers, of course they are not going to find favor with the idea and it seems fair to let employees know they would be paying for the practice out of lower salaries or wages.

    Public Banking sounds great for some podunk state like North Dakota or a community where the long term interests of the public are put ahead of the profit motive but realistically, I can’t say that I trust politicians of any sort to make it happen correctly and the public has the attention span of a small child. Houston is a low cost leader for employee compensation when compared to other large cities or organizations so the expertise to do it right is unlikely to be interested. Given city leaders and their appointees can’t properly fix potholes, staff fire or police, and all the other aspects of simpler things, why do you think they should be trusted with banking? Remember, these jokers have shown such wonderful financial management skills that you could probably come up with yet another laundry list of failed projects or scandals. Am I wrong in that belief? I don’t think so.