What a difference a year – and better sales tax receipts and a better real estate market – makes. Mayor Parker has unveiled her budget for the 2012-2013 fiscal year, and it promises no service cuts, no layoffs, and no tax increase.
Mayor Annise Parker
Last year, the city issued 764 pink slips and cut services as budget officials grappled with a projected $100 million shortfall. Projected growth of city property and sales tax fuel an expected increase of $78 million in general fund income for the coming fiscal year.
Parker’s budget proposes spending all of the increase and tapping the city’s reserve account for $25 million. She’s proposing buying several new things with that money:
- Offering single-stream recycling – the big rolling green barrels instead of the handheld bins – to at least 30,000 more Houston homes.
- Increasing staffing hours on the city’s 311 help line to 24 hours a day, seven days a week. The one-stop line for reporting potholes, getting city service schedules, checking up on your speeding tickets and accessing scores of other city services currently operates 14 hours a day.
- Putting $2 million into the operation of a sobering center the city hopes to open later this year. Police will have the option of bringing people they detain for public intoxication to the center instead of jail.
- $5 million for forensic services. It is to be used for improved crime lab operations by a new independent board of directors the mayor hopes to install or on reducing the backlog of untested rape kits.
The police department budget alone is proposed to grow, by $58 million. Much of the police spending increase is explained by built-in increases in pension contributions, health benefits, seniority raises and fuel costs.
Here’s the Mayor’s press release on the budget, which has more details. Looking at this reminds me why I believe that it may be harder for someone to defeat Parker in 2013 than it might have been to do in 2011. The expansion of curbside recycling, which seemed unlikely to happen previously because of the Mayor’s reluctance to seek a garbage collection fee, is the sort of thing that will make voters happy. The sobering center, which has now been approved by Council, will save the city money and will enable it to reach the Mayor’s goal of getting the city out of the jail business. The money for forensic services is a step towards another of the Mayor’s goals, which she addressed in her inaugural speech. Whether or not the city can work out the governance issues with Harris County, getting that done would be a huge accomplishment. My point is that by the time the 2013 campaign starts up, she’ll have a lot more positive things to point to, something that’s a lot harder to do when you’re cutting $100 million from your budget. It’s not a panacea and there are no guarantees, but I do think any potential challengers may find that the road next year is rockier than they thought it might be in the immediate aftermath of the 2011 elections. The environment just isn’t going to be the same.
There’s still a lot to do before we even start thinking about 2013 elections, and first up is Council’s turn to examine and attempt to modify the budget. I’m sure everyone will have their own priorities. And I can’t let this go without noting the following:
Councilwoman Helena Brown alone opposed city funding for the [sobering] center.
“The project can be better accomplished by the private sector,” she said. She also emphasized her opposition to excessive spending and said the sobering center is “like a slow cancer that will contribute to the death of the city.”
And so she voted against an action that will save the city a couple million bucks a year because she opposes excessive spending. We need a new word, to denote when something passes unanimously except for CM Brown who voted against it for reasons only she can understand. Leave your suggestions in the comments. Stace has more.
UPDATE: Here’s the full Chron story on the sobering center.
Term: unan”no”mous.
Maybe call it pulling a Jolanda. You say potay-to, I say potah-to, you say Helena, I say Jolanda.
I’m pretty sure you could replace that woman with a robot, or a TSA worker, because she is clearly incapable of independent thinking. She’s got her orders (“no spending!”)… damn everything else, including consequences.
I would start calling her the Helenabot. Not sure about what to call what she does…
I’m apparently old enough that I remember when it would have been called “Pulling an Addie”
Actually, Addie was queen of tagging. She voted yes.
Mr. Kuff……..You are a trusting soul. The budget avoids reporting on a number of issues that will come to light soon. Did you read the Mayors Financial Commission’s report. Further many broadly respected financial people are convinced that the City will have to declare bancrupcy to survive the growing debt. I would suggest that you approach the budget with more caution.
Many may not agree with Helena Brown and she may have to learn to articulate her positions in a more convincing and colaborative way……but she is the squeaky brakes on spending. The Mayor and City Council cannot wait to spend the taxpayer’s next dollar. The Mayor should heed the fast growing number on water bill deliquencies.
Sorry, but Helena Brown is an idiot, and not even a useful one. The private sector has never shown an ability to run something like a sobering center better than government – the motivations are all wrong. I don’t vote Democrat, but think the sobering center is a good idea, given the costs of tossing someone in jail for public intoxication.
Jack, good comments. Rumor is your going to run again? Do we run in the same crowd? Why don’t you call me next time. Maybe we can work together. My cell phone is (281) 850-0171 Cell.
If you scrutinize the proposed budget, it does not account for many items, hides others, and shuffles still others off to who knows where. The use of rainy day funds and suggested increases in revenue is fine except the reality is that a lot of phantom accounting is taking place.
The city is not bankrupt however. If the balloon payments in debt that were put in place by Lanier, Brown, White, and now Parker are not addressed, the city will certainly have austere times but I doubt a bankruptcy court will credibly interfere anytime in the near future. The dream of some in the GOP is that bankruptcy is a way to break unions, dismantle pensions, and allow all sorts of mischief but it won’t happen that way. The pensions are earned benefits and the unions are federally protected. The first place the judge would look would be spending, the second would be on cutting interest payments on debt, if need be he could also void bond debt.
Rusty well said, one other point is that in my opinion the unions are already busted. Some republicans like to look at things to blame. They blame the unions because the unions cause this or that to happen. When unions do what they do it is bad for society. Well I believe the only power the union has is to call or threaten a strike. When is the last time you have heard of a union calling a strike? Maybe the unions are getting everything they want so there is no need for a strike? Maybe the unions no longer have any power to do anything other than collect dues. You tell me.
I agree with some of the sentiments here but others seem woefully inadequate. I have yet to read the entire proposed budget but even a passing glance at some sections like public safety shows a lot that needs to be explained. Unions in Texas are a curiosity to say the least, most police and firemen I know joining solely for legal protection from a city well known for playing fast & loose with the law and policies they find so inconvenient. I submit that the way the city handles it’s classified employees (and has for years) is more a factor in how said employees tend to treat others, the adage of “sauce for the goose is sauce for the gander”, than low education requirements, poor training, or bad arbitrator decisions.
Since their unions can’t strike, their real power is in influencing politicians in Austin, their track record vastly superior to that of highly paid consultants and lobbyists the city employs. Given the levels of direct pecuniary pay compared to their counterparts across the nation, Texas, and even locally, I don’t think anyone could credibly state local unions are getting their members anything close to what they want, your mileage varying based on the degree of blinders you are willing to apply. HFD is around the 150th lowest paid department based on recent studies and HPD is at the bottom of the big cities even if you don’t include HPD’s wildly lower pensions (especially now).
In terms of the city being bankrupt, if you look at a realistic approach to valuing the assets of the three pensions, the crisis being touted by a few is merely a distraction from other things going on. Take the amounts currently listed by actuaries as the unfunded amount and work it as a 30 year mortgage (all three use a 30 year basis), changing the rate of return to a 30 year sliding scale (sort of like a variable rate loan).
Houston is currently seeing the hiring wave of the late 80’s to mid 90’s meet up with the introduction of the DROP benefit by Lanier (this was instead of raises, all financial projections at the time showing it would greatly increase costs), combined with the later pay increases of Brown. This will pass as folks retire (HFD has a limit on years in DROP and HPD officers average 28 years of service), the post 2004 civilian and police employees getting far less (and no DROP), to make the dire predictions laughable in terms of reality.
Ross – You are correct in stating that a for-profit sobering center would not be appropriate for the needs of the city. It is the same reason we do not use not for profit police. Matters of law enforcement are handled by governmental entities; this is a tent poll to American law (I know I am preaching to the choir). It would not be appropriate for a police officer to take someone to a for-profit clinic without their consent, or without a trial, such as is the case with privatized prisons.
Rusty – you are correct that the proposed FY13 budget relies on a $25 million expenditure from the rainy day fund. I strongly assume that budget amendments will be proposed to avoid this. I cannot speak to what kind of amendments might be offered, I don’t know, but I am sure this is something that will be considered.
Rusty – you are also correct that the city is not teetering on the brink of insolvency. Prior to the Lanier administration, there was a strong push to grow the municipal workforce. The city’s payroll ballooned. Under the Lanier and Brown administrations, there was an attitude that the city could not attract the best possible workforce but compensation was too poor, especially in HPD. To that end, the administration bumped up the pension plan. Of course, we are paying for these decisions today. We have a much smaller workforce, and the new pension, plan D, which I am on, is much less generous from the standpoint of the pensioner. However, I do agree we need to address some of the long-term problems with our budget.
Joseph – absolutely spot on in your reply to Kubosh. The unions in the city cannot threaten to take strike action against the city. Union contracts are meet and confer, and therefore, unions cannot try any sort of debilitating organized industrial action if they cannot get their way.
One of the more long-term items we need to think about regarding the city coffers are the financial implications of the growth and evolution of the city.
Since the 1990s, we have seen the market punch the gas pedal on the growth of high-end development in the city. I think 10 or 20 years in the future, we are going to see higher property values inside the city. Real estate prices within city limits in many neighborhoods are quickly approaching or exceeding levels in other cities. No longer will Houston be seen as a budget-friendly place to call home.
The census reflects the fact that Latinos are moving out of ethnic enclaves and integrating with the rest of the region. Along with slowed immigration, this is a key indication that City of Houston neighborhoods will grow more affluent. This will change the needs of the city insofar as providing services and alter the tax base. Of course, it spells a different story for the region. It will be interesting to see how this plays out in the long-term.
Of course, if the 1980s taught this city anything, it is that a sudden and long-term decline in the energy industry could be a devastating thing for the city. We are far more diversified today than thirty years ago, but this would cause damaging economic flight from the city and also alter the way we view city finances.
Unions can’t strike???? You guys miss my point. When unions first started out it was illegal to stike. What is legal and what is political are two separate things. What would they do if one of the unions did strike? Hmmmm? No one showed up for work for one day? It sure would be interesting don’t you think? Have a good night my friends.
Local unions have not been on strike, nor would anyone tolerate it happening. The public safety crowd wouldn’t do it, though they might be less willing to cut corners to provide timely responses or truncate paperwork to a bare minimum. The municipal employees would just be replaced like Reagan did the air traffic controllers if they struck or particpated in work slow downs. I’d like to know who thinks anyone in city employ is happy with their pay when shown comparisons to other places, how their procedures are done, or even how employees are treated much of the time.
When was the last time a public safety union (police or fire) engaged in a strike in the Houston area?
In fairness to coucil member brown-i dont think she was suggesting that we have police officers drop off at private facilities, as Eric Weinmann would have you believe-she just doesnt believe its the place for the city to serve-on this issue, i strongly disagree with council woman helena brown,threw out most of the nineties i spent many many many nights in the city of houston jail on a public intoxication charge-this cost the city tons of cash,there would have been a savings if there would have been a sobering center like san antonio has already had in place for over tens years.What has begun to worry me about helena brown is this,it doesnt appear that she fully grasp’s the role “human compassion”plays in political desisions,in the city of houston,some agenda items over power partisan politics and require a yes vote based on common sense,the sooner helena brown realizes that not everything down at the city of houston is political the better off she will be,but to continue to strong arm until the bitter end,is beginning to worry me.
lastly-charles kuffner-“put a fork in it” stardig brenda will not be reelected-i will not have her back on council,i dont like when council members try to portray to be a member of a party when in fact their on the other side,like a couple of council members that come ti mind…………
eric weinmann will you spell check all this , i got-2-scram………
joshua ben bullard
In my opinion, the city has to many duplicate employees. The purpose for the layoffs was to downsize manpower, hold city employees accountable for their jobs, be a more proficient provider of services and improve spending for future budgets. The few (750) people laid-off did not help the declining budget. Also, governments (state, city, county) are starting to switch gears on the long term pensions pay outs. Even the Federal government is moving in the direction of 401K plans. When pensions started, no one thought people would live beyond age 75 or that a young person (age 18) could enter the city government workforce and retire at a young age (early 50’s) with a good pension payout. Prime example is General Motors. Now imagine this person’s life expectancy to extend beyond age 75. Another thing that happened within the City of Houston government is that employees were promoted and no pay increases for some and some demoted but did not decrease the demoted employees pay. The end result is you have some managers and supervisors making a lot less than the employees they are supervising. If they don’t decrease the demoted employees’ pay they will have to increase the promoted employee pay; therefore, losing even more money on salaries. This is not a good practice if the City is trying to retain good employees long term. Also, what happened during the layoffs is just another example of a reorganization plan gone wrong. The mayor (Annise Parker) called for a reorganization plan for the entire (all departments) city government as an effort to “trim the fat” and improve the budget but her plan failed. The outcome is after the “cattle call” layoffs, employees were reassigned to new positions as an effort to make people accountable, work more efficient and to demote people who should have not been in the positions they were in away. The mayors attempt to “tame the bull” failed big time and from what I understand she “jump ship’ on the original plan (reorganization of all city departments). Furthermore, why does the City of Houston government have so many Human Resources employees with high paying salaries (go to the Texas Tribune to look up salaries starting with the director of HR {Omar Reid} salary and follow through with all HR representatives) if they are not hiring. Somebody need to smell the spoil fish in the kitchen (investigation of salaries, promotions, demotions with employees keeping same high pay salaries after being demoted, Hispanic/Latino human resources representatives practicing cultural bias hiring (referring, interviewing and hiring only Hispanics/Latino candidates) and hiring of family and friends practices that continue). The City of Houston’s Human Resources Department is a very dysfunctional (corrupt) department. If there is ever a cause for “whistle blowing” this department would be it.
Saul, Human Resources does a lot more than hire candidates. It’s interesting that you claim Latinos are the ones applying bias too since the claims for years now have been it was the blacks doing the same thing. I don’t know enough about the subject other than the city representatives telling us (at job fairs and the like) that there were set “goals” (quotas) in hiring police and fire but I’d like to hear more specifics.
The layoffs were exactly the cluster they were always going to be. 764 positions killed, some of the employed moved to other openings (often at a lower pay classification) that had to be filled (usually by grant) and others promised similar jobs only to find out they took a 20% or more cut but had to work a lot harder. Currently, anyone applying to the city should be aware that police will have to stay until they are 55 years old, pay more, and get a smaller pension along with fewer days off, while municipal workers have to stay until they are 62, also have no DROP, get a smaller benefit, and will still be paid like entry level workers unless they win the proverbial lottery to get a management job.
Your response is interesting. Of all the things noted in my comments, you responded to the Hispanic/Latino HR comment by stating in the past “black” (African Americans politically correct) were accused of unfair hiring practices. I don’t think African Americans had the “last say” in hiring other African Americans. Trust me I know what I am talking about. Make sure to get the City of Houston hiring statistics (it is public information). If the hiring practice mention continues at the rate it is going, the majority of City of Houston employees will be Hispanic/Latino. Also, the original layoff plan called for more than 764 positions.
The original layoff plan was stated as 10% (2000+) of the workforce (20000+ employees) until the mayor was question by city council members “show us the figures/money”. After the request for accountability (odd that more budget money was found), the new layoff plan reduction in numbers was the final 764 (far less than the original estimate 2000+). Also during the time of layoffs, City of Houston municipal employees (not the HPD/HFD union) found out just how weak the union is. Several City of Houston employees that were unjustly (age, cancer stricken, etc.) laid off, petitioned for help and the union could not do a thing to recover employment for these employees. In fact the layoff ordinance stated evaluation scores, years of service and targeted job category would be the factors for layoffs but was not the only factors. Of course, I understand there are some employees in litigation because of this unfair practice.
Furthermore, your statement about Human Resources doing more than just hiring, of course they do more than just hire. They are responsible for benefits, etc, etc. My point is, there are many more human resources staff (get the numbers public information) than work being done or to be done. If I am not mistaking HR is one of the few departments that didn’t lay off any/many employees. In fact, it is the one division that promoted employees and gave pay increases during the lay-offs and demoted employees several pay grades but let the employees keep the same pay (higher than normal wages). Isn’t a demotion supposed to reduce pay?
Long gone are the days of heavy staffing (one employee get the paper, one get the pencil to write the memo and one copy the memo {figuratively speaking }) in corporate comapnies. This is a very common practice of City of Houston and other governments. I think the mayor’s original reorganization plan was to alleviate old “habits” and improve the overall organization. Too bad it (reorganization) failed. Talk about “big” (heavy staffing) government, to increase the budget for future pension payouts this old practice has to be addressed and the 764 employee lay off did not address it. Remember this if the city of houston “big government” continues pensions payouts will dwindle. That is why so many non government corporations eliminated pension plans and moved to the 401k plans. As stated prior, General Motors is an example of what is to come. Retirees are living much longer than anticipated and with the high number of “baby boomers” retiring pensions are going to be in big trouble. If you are a City of Houston employee don’t get comfortable relying on future pension payouts.
Finally, do you think city services will improve now that the mayor’s budget has improved? For example, I would like to go to the library on Sunday’s and more than 2 late evenings a week and will parks and recreation increase services? Would be nice to know that pool and park services and extended library hours during the summer will be available to families that cannot afford to pay for extracurricular activities.
Saul, in times of downsizing in private sector positions, HR is typically the last to go and/or they increase hiring for a lengthy period of time as transition efforts come into play. This includes the counselors big companies hire to lower liability as well as the ones used to pour over who should “really” get laid off, regardless of stated formulas or factors. The city made a half-hearted attempt to do this too, hence my original comment that it was a cluster. Since you’re asserting that Latinos make up a disproportional amount of hires though, you should be the one supplying data.
My comment there was simply that it used to be certain city departments were claimed to hire blacks over Latinos, Whites, or Asians; this repeatedly addressed at City Council meetings during public pop off sessions. As the city has such a large number of Latinos, it is the largest group of people and growing, it would not surprise me they were in fact hired more, the likelihood that one would speak Spanish fluently increasing their chances of employment given how many positions either require language skills or give them extra consideration.
For pensions, the private sector first raided their pension systems when the oversight was lacking. Companies funneled tens of billions (maybe hundreds of billions, at least in adjusted figures) out of such systems during the 70’s and 80’s, using any trick in the book to access such money to invest in capital improvements or hand out dividends rather than pay employees what they earned. Such companies, and there were a great many of them, also scrutinized their employee rosters to fire, layoff, or otherwise dismiss employees right before they would be eligible for benefits. It became such a common practice that the feds stepped in and established all sorts of laws as well as the pension guarantee system they have been under since the mid 80’s.
There is still a sizable number of private companies that have defined benefit pensions and they are doing just fine overall. They learned the trick to establishing and keeping loyal employees was to treat them properly. Government agencies once were so poorly compensated compared to private sector that pensions were just about the only means of finding qualified people to hire, it was not enough to completely balance out the equation but it made a huge difference (the private sector still pays significantly more up front and as these pension cuts continue, in retirement as well).
Houston went through a major hiring spree 20 years ago in public safety workers. That bubble is now hitting their eligibility to retire, Lanier’s method of playing it cheap (DROP instead of raises) finally biting city finances in the behind. This was predicted 15 years ago and could have easily been taken care of thanks to the extended bull markets but politicians wanted to keep spending money will pushing hidden costs into the background. A quick read of newspaper headlines shows the quality of employees hired since the 2004 cuts, future cuts only going to make things worse as the new employees get less compensation compared to private sector positions (or jobs for other cities and agencies elsewhere).
Defined benefit pensions are not the source of city financing problems, continually deferring a wide variety of liabilities is the problem. That is because term limits means buying votes now can be expensed to someone else down the road. Had the city paid into the systems as it is supposed to according to law and sensible accounting practice, we wouldn’t be talking about it right now. All the numbers shoved down our throats of late are based on the market crash of 2008, all three city pensions typically returning double digit amounts on average rather than the stated 8% when you base it on a 30 year basis (the same basis the liabilities are based on).
According to the Long Range Task Force, the liabilities are already accrued too so cutting future employees will not make a big dent in costs. As the city was the culprit in underfunding each year, not the employees, and the benefits are contractually earned, I think said employees will have enough chance of prevailing in court, bankruptcy or district, should some genius get the bright idea that declaring Chapter 9 bankruptcy would allow the city to erase all employee obligations without touching bond debt. The city has over $13 billion in debt, the possibility that creditors are told they won’t be getting interest payments for a specified period of years quite likely. Ultimately though, the court could force the city to stop funding frills until it is in better financial order.
In terms of the proposed budget improving services, I would suggest sweeping reforms in how the city does business, how services are delivered, and what services should be considered most important to fund as well as corresponding funding of all debts. This would be an austerity budget and applied for several years until the city was better off, the employees likely taking a hit for the same amount of time too but conditional on restoration once all was well.
Mr. Houston, I have been following the comments from you and Saul. Saul has a good point and is saying what some want to say but are to afraid to comment on the issues noted.
I assume you are a Hispanic City of Houston employee because you are very persistent in defending why so many Hispanics are being hired at the City of Houston. Also as Saul stated to be correct, please say Caucasian and African American when you use racial descriptions such as Asian and Latinos. Is Latino, Hispanic, Mexican or Puerto Rican all correct descriptions? I hope you follow my point.
Can you state the departments that hired many African Americans? Are they currently hiring African Americans because in this economy I will pass the word along?
To speak in defense of many African Americans hired for the City of Houston government agency, during 1970 thru 1990, many qualified college educated, degreed, African Americans enter the City of Houston government. During this time Houston’s private corporations were not hiring these educated professionals. In addition, many professional Caucasians did not want jobs at the City of Houston and the Asian population was very small in the Houston Metro area and was not represented in the City of Houston government workforce.
Another thing that I noticed is GED educated is on the rise. Fact, I recently seen two Hispanic people in my department promoted they did not have the educationl or job requirement of the position and these two people were not the best suited candidates (I participated in the interview process). The two people were promoted by a Hispanic manager that went the extra mile to convince everyone they would be the right choice because he knew the two people personally. What a big mistake and everyone is paying for it. All I am saying is hire people because they are qualified to do the work.
We are moving toward a workforce that is lowering educational and work experience standards to accommodate a language that is not the “mother tongue” of this country. What happen to the words, College degree or even High School diploma needed? Here is a simple equation that describes the direction that governments are moving, GED + bi-lingual=job
The largest group inside the city is Hispanic and they consume a disproportionate amount of resources even then because they tend to be poor, uneducated, and live in bad areas of town. Many of them speak poor English and the city tries to hire employees that speak Spanish to assist them. As a condition of employment, a second language becomes a barrier to those that don’t make the effort. I’d be curious to know how many whites get paid extra for speaking a second language as well as other groups, even more curious to know how much influence it has had on hiring.
Larry, I’m not Hispanic and I wasn’t defending “why” they are hired, just pointing out what I have seen firsthand. As someone personally impacted by quota hiring, I assure you that I’m all for choosing the most qualified person for any job. In some cases, that person happens to be one color, race, gender, or whatever other factor people focus on and in other cases it is not. There are departments in the city with overtly stated hiring goals of 50% or more minority and women, the police being the largest such department for at least the last 20 years.
Latinos comprise over 40% of the city population from what I understand. This figure is growing and has for a long time now. As such, a growing number of jobs require applicants to speak Spanish or at very least give them the nod when all else is reasonably close. Some positions have even had under qualified applicants selected because of this one factor, the department director probably refusing to pick those that would need translation for two thirds their caseload. As far as “mother tongue” languages, I doubt many of us speak the various dialects of Native American tribes so I’ll just leave that alone.
In terms of specific employees working out or not, no matter what process you use or no matter whom you hire, this happens. It holds true in the private sector as well as public, small companies and large, the city just needs to join better organizations where if someone doesn’t work out, there is a better method for restoring them to the position they could handle or allow them to be quickly mentored to prevail in the position itself. These comments hold true for all races, a good many of my friends over the years also proving formal education is no panacea for a strong work ethic, my own background including a GED.
One last thing, I strongly suggest you tour various city facilities. By doing so, you will see which departments hire what kinds of people (at least the obvious categories). I’ve seen large numbers of black folks in HFD, HPD, Public Works, Health & Human Services and the libraries but I don’t get around as much as someone really needing a job might want to.
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