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Revenue cap will be on the November ballot

Here it comes, assuming the pension reform bill doesn’t get mugged in a dark alley.

Mayor Sylvester Turner

Mayor Sylvester Turner plans to ask voters to lift Houston’s cap on property tax collections in November, a move that could loosen one of the city’s primary fiscal constraints as it confronts still-hefty pension and debt costs that leave little breathing room to maintain city services.

The referendum would fulfill the mayor’s pledge to try to overturn the revenue cap if he succeeded in reforming Houston’s pension systems.

“Repealing the revenue cap means a better credit rating for Houston and lower costs for taxpayers when we finance improvements to the city buildings, parks and libraries that serve our neighborhoods, aging fleet, bad streets, illegal dumping and deferred maintenance,” Turner told an audience of 1,400 Thursday at his annual State of the City address. “We must achieve sustainable structural budget balance by making sure that our recurring income is equal to or more than our recurring expenses, and in fact, we must always seek ways to reduce our expenses.”

[…]

Houston’s pension reform deal as passed by the Senate includes a requirement that voters approve the $1 billion in bonds Turner plans to inject into the under-funded police and municipal pensions. The bonds would not require a tax hike, but the bill would reverse the groups’ benefit cuts if voters reject the bonds.

Meanwhile, a petition submitted two weeks ago that is being reviewed by the City Secretary calls for a public vote to require a shift to 401(k)-style defined contribution plans for all city workers hired after the start of 2018.

Lifting the revenue cap, on the other hand, would increase homeowners’ property taxes. The owner of a $200,000 Houston home saved about $84 in taxes over the last three years, costing the city an estimated $220 million in revenue.

“You’re risking a lot by putting two potentially inflammatory items on the ballot that could stimulate an anti-Turner vote,” University of Houston political scientist Brandon Rottinghaus said, noting that he thinks the pension obligation bonds alone would pass. “But if you put in bond plus revenue cap, that’s a bitter pill that conservatives would have to swallow all at once.”

Harris County Republican Party Chair Paul Simpson said the party has not decided whether to back the issuance of pension obligation bonds, but it already has committed to campaigning against lifting the revenue cap.

“Without that cap there, there will be the inevitable pressure to solve every fiscal problem by raising taxes,” Simpson said. “It’s the best tool we have to actually impose fiscal discipline on the city.”

Turner appeared undaunted by the prospect of a financially weighty ballot.

“Protection – it’s not free. Police officers are not free. … Firefighters are not free. People who are fixing our streets – they are not free,” he told reporters after his speech at the downtown Marriott Marquis hotel. “When people have a need, they want the city to respond. Well, we want to respond.”

I’m all in on this, as you know. My preference would be to go for full repeal, though what the Mayor has generally talked about is building in an exception for public safety. Which I can live with, given that revenues tend to be fungible, but the honest and future-lawsuit-proof path is to ditch the stupid revenue cap altogether.

The likely presence of a pension obligation bond referendum on the ballot doesn’t strike me as a problem, as both items can be sold together as a package deal to get Houston’s finances on firmer ground. And if the people who are now insisting that we vote on the pension obligation bonds then show their true colors by opposing those bonds, well, now we’ve got a villain to run against. The Mayor can campaign for them by sending Greater Houston Partnership types out to the wealthy neighborhoods to talk fiscal responsibility, and he can send Democratic partisans to the clubs and other receptive audiences to tell them to send a message to the out of touch Republicans in Austin that they can’t meddle in our city. I’d feel pretty good about our chances with that kind of campaign.

It’s a different question whether Metro will want to join in and put its own referendum on the ballot as well or wait till 2018. There’s a case for waiting and a case for action, and I’m glad it’s not my decision to make.

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9 Comments

  1. Bill Daniels says:

    “We must achieve sustainable structural budget balance by making sure that our recurring income is equal to or more than our recurring expenses, and in fact, we must always seek ways to reduce our expenses.”

    If Houston did a better job at seeking ways to reduce expenses, they wouldn’t need to lift the revenue cap, a cap approved, by the way, by the taxpayers of Houston…the folks whose pockets are being picked.

  2. Ross says:

    @Bill, just what expenses do you think can be reduced enough to reduce the need to eliminate the revenue cap. Be specific. Here’s a tool to help, the CoH budget page, http://www.houstontx.gov/budget/17budadopt/index.html

    Public Safety is almost 59% of the current budget, and costs more than the amount of property tax collected.

  3. Bill Daniels says:

    Ross,

    First, I’d start with reallocating resources, especially within the police department, to do Rudy G. style “broken windows policing.” Houston needs to crack down on quality of life crimes like illegal dumping. Pull cops out of administrative positions and focus on, for example, catching and prosecuting illegal dumpers. Put those administrators undercover watching people dump trash out of their car windows at intersections and ticket those folks. Make them pay heavy fines and jail them, and deport the ones that can be deported. If you are a criminal, Houston should be a very unpleasant, unwelcoming place to be. Boost the neighborhood code enforcement. Harass property owners to make them cut their grass and have some sort of link to charitable groups that would be willing to help the poor elderly and infirm with that. Able bodied? Cut your damn grass.

    End the bike trail program until the streets are fixed (so basically, end it forever).

    Cut firefighter staffing. If Houston is taxing people out of their houses and businesses, then they just can’t afford Cadillac fire coverage. They’ll just have to make do with Chevy Cruze coverage….basic, but gets the job done, for the most part.

    Finally, I really like the over simplistic cut every department 1% a year approach. Let the departments figure out how to do that. Do a real cut, not lower the amount of the increase in spending…..actually spend 1% less than the year before.

  4. paul a kubosh says:

    Lets see:

    Ross: Will vote to pay more taxes.
    Bill: Will vote to not pay more taxes.
    Paul: Will vote to not pay more taxes.

    Looks like you are losing Ross.

  5. Ross says:

    @Paul, I haven’t said how I will vote, but I do want to know how people think the City of Houston budget can be cut enough to actually make a difference in the tax rates. What services are you willing to forego? What employee benefit are you going to cut?

  6. paul a kubosh says:

    Your questions do not cover all the expenses in the chart of accounts. It like asking when did you stop beating your wife. Have a good night and go Rockets.

  7. Neither Here Nor There says:

    Not only will I vote to pay more taxes, I intend to work to get people to pay more taxes to continue the services that we receive by the City.

    The County deserves nothing as we get nothing from them.

    But that is the Republican strategy to go after local “Democrats” to get the minds away from the Lunatic that leads their party, a party of corruption and evil.

    I don’t know about Paul, but Bill has indicated he does not live in Houston, so he ain’t voting here.

  8. C.L. says:

    I got a plan. Red Light Cameras !

  9. Paul A Kubosh says:

    C.L. LOL, I only wish. I could use the free press.

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