Houston Mayor Sylvester Turner talks to the media in March. City Council on Wednesday approved the last budget of his eight-year tenure.
Elizabeth Conley/Staff photographer
Houston Chronicle
Yilun Cheng, Staff Writer
Houston city staff will see pay raises, money will go toward sidewalk repairs and residents won’t have to maintain their own drainage ditches anymore. All are part of the $6.2 billion budget that passed through Houston City Council with just two no votes Wednesday.
The council voted, 15-2, to approve Mayor Sylvester Turner’s final spending plan, which features the largest net savings in decades. The budget includes previously announced pay raises for all city employees, a drastic increase in tax dollars for Houston’s streets and drainage program, and a plan to revive a long-discarded program for staff to proactively clean and maintain open ditches across neighborhoods.
At-Large councilmembers Mike Knox and Michael Kubosh voted against the budget. Knox, who has consistently voted no to the past seven budget proposals, said there needs to be a larger reform to ensure Houston’s finances are structurally sound. Kubosh voiced concerns about the uncertain impact of state bills on the city’s financial position.
Turner, on the other hand, said this is the strongest budget his administration has adopted in his eight-year tenure. The city’s savings are set to rise to $405 million, surpassing the legally required level by approximately $220 million. The mayor said the high fund balance will set a strong foundation for the next administration after he leaves office early next year.
“Any mayor that comes in has got to deal with the challenges that come before you. For me, I’ve had to deal with unfunded pension liabilities that had not been addressed in 20-something years … and a $160 million budget deficit,” Turner said. “There are a lot of good things in this budget. It not only factors in fiscal year ’24, but it also provides an additional cushion for the next mayor and City Council as they deal with fiscal year ’25.”
Overall, the city’s $3.3 billion taxpayer-funded general fund, which covers core services, will see a 7.7 percent increase from the previous budget. Most of the additional spending will go toward already announced pay hikes for city workers — 6 percent for firefighters as a part of the three-year, 18 percent increase and 3 percent for police officers and municipal workers. In line with previous years, police, at $1 billion, and fire, at $593 million, make up about half the operating budget.
City Controller’s warning
The new budget is set to draw another $160 million from the American Rescue Plan Act, a funding source that the city has relied heavily for the past three years to avoid what Turner said would be “significant” service cuts and layoffs. As federal dollars are set to dry up, officials have forecast deficits between $114 million and $268 million during the next mayor’s first term.
In an op-ed this week, City Controller Chris Brown expressed concern about Houston’s practice of using nonrecurring federal funds to fill its structural deficit, equating it to a homeowner selling furniture to pay the mortgage. He further cautioned that the recent increase in sales tax revenue may not last, as inflation could reduce residents’ discretionary spending.
“No one administration or City Council is to blame for these challenges, but they do require our attention,” Brown said. “We must prepare for the fiscal cliff looming on the horizon.”
Turner said many of Brown’s previous forecasts have not come to pass and tackling future financial hurdles is a task for the next mayor.
“There are some issues that are on the horizon and whoever’s going to be coming forth will have to deal with them, but if you’re a good manager with a good team, you ought to be able to address them,” Turner said.
Turner blasts state legislation
Adding to the city’s financial uncertainties is a recently passed Texas legislation requiring Houston and its firefighters go to a binding arbitration to settle their contract dispute. On Wednesday, Turner denounced state lawmakers, including state Sen. John Whitmire, a contender in Houston’s mayoral race this year, for backing the bill. Whitmire’s goal in passing the arbitration bill is “to tell the Houston firefighters we will not forget them,” he said.
But Turner warned that the binding arbitration’s outcome could impact Houston’s fund balance, presenting an additional structural challenge to the city’s finances, which he believes are already constrained by one of the most restrictive revenue caps in the country.
“If you’re going to be fiscally prudent in Austin, you don’t take measures that’s going to adversely impact the city’s budget when you haven’t even looked under the hood and know what’s there,” Turner said. “That’s bad management, so sometimes people demonstrate their management before they even sit in the chair.”
Last-minute flooding love
The council also reviewed the nearly 30 amendments proposed by members, most of them seeking to draw additional dollars from the city’s substantial fund balance to support a wide range of city programs.
Turner promised to reverse a decades-old policy that put the responsibility for maintaining open ditches on property owners, which has put a disproportionate burden on low-income communities of color in the Northeast area. With a $20 million commitment supported by a Wednesday amendment and $20 million existing budget in the Public Works Department, Houston is set to place city staff back in charge of the work to prevent neighborhood flooding. An ordinance to enact the change will come to council in the next few weeks, the mayor said.
The upcoming fiscal year will also witness a sharp increase in tax dollars — from $77 million this year to $123 million — that can be used for “Build Houston Forward,” the city’s street and drainage program. Most of the funds will be funneled toward large-scale capital improvement projects already in the pipeline, but Turner said they will also supplement the smaller-scale projects that Public Works will carry out.
“Never before has a city budget dedicated this level of funding to improving our drainage infrastructure,” said Councilmember Tarsha Jackson, whose district includes Settegast and surrounding neighborhoods. “Too many of our residents still haven’t recovered from Harvey. We’ve seen how difficult rebuilding is. It is important that we take as many preventive measures as we can so we lessen the agony of rebuilding.”
The final budget, compared with the initial proposal, also included another $1.8 million for sidewalk repairs, $500,000 for the municipal animal shelter to purchase an adoption trailer and three enforcement vehicles, and $600,000 to support DNA testing at the Houston Forensic Science Center.
“I’m certainly proud of what we have done,” Turner said. “We have budgeted conservatively, and the fruits are demonstrated in the budget that has passed.”
yilun.cheng@chron.com