The Texas Supreme Court on Friday denied Houston’s motion to appeal a long-standing lawsuit requiring the city to spend hundreds of millions of dollars on street and drainage projects.
Friday’s ruling could add yet another financial challenge to a strained city budget. Officials are already dealing with a ballooning $230 million budget shortfall, and officials have yet to put forth a plan for how to pay for its firefighters settlement, which resulted in $650 million worth of back pay.
Mayor John Whitmire wrote in a statement Friday afternoon that he didn’t disagree with the ruling’s premise and said the city would comply with the court’s decision.
“Public safety and infrastructure have always been my priorities and the reason I ran for mayor,” Whitmire wrote. “I was aware of the pending lawsuit from 2019 that I would inherit, and I knew it would impact our budget. This will allow us to collaborate with other levels of government and require a continued examination of all city operations to find cost savings, which is part of my commitment to eliminate waste, duplication, and corruption. Let’s go to work.”
Controller Chris Hollins warned officials in July about the “big potential expense” that could fall on the city should it lose the lawsuit. He estimated at the time that the city would have to immediately pay anywhere from $110 million to $120 million.
Whitmire’s first budget put around $135 million toward streets and drainage, a figure plaintiffs say should be around $100 million more based on the charter.
“We have to be clear about in the instance that if we were to lose that lawsuit — which we’ve now lost twice in a row on it — how we cover that for the current fiscal year,” Hollins said at the time.
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The lawsuit was kicked off by a pair of engineers who helped pass a charter amendment requiring the city allocate about a fifth of its property taxes, or 11.8 cents per $100 of taxable value, toward street and drainage projects every year. It also added a $5 charge to Houstonians’ water bills to help supplement projects.
The rules in the charter amendment, though, were not necessarily followed as written.
As the city hit its revenue cap in 2016, leaders had to start collecting less in property taxes, and the plaintiffs alleged that officials shortchanged the drainage fund. The city would have put $420 million more toward street and drainage over the last 10 years had officials stuck to the formula in the charter.
Emphasis mine. See here, here, and here for the background. At some point, Mayor Whitmire will put forward a plan to pay for all of this, maybe possibly hopefully please please with sugar on top getting some help from the Legislature, and then we’ll see how doomed we are. I highlighted that bit from the last paragraph as a reminder that the original sin at the root of this is the stupid revenue cap, which has done nothing but greatly exacerbate the city’s financial woes. We’ll know if the Mayor is serious about trying to fix this mess, which he has helped magnify, by whether he makes a real effort to do something about that.