Mayor Sylvester Turner walks out in front of City Hall as he attends a news conference where he endorsed Rep. Sheila Jackson Lee in the race to succeed him in the mayor’s office on Wednesday, Nov. 8, 2023 in Houston.
Brett Coomer/Staff photographer
Houston Chronicle
Abby Church, Dylan McGuinness, Staff writers
Houston Mayor Sylvester Turner defended his record of handling the city’s finances on Wednesday, as local business officials, mayoral candidates and the city controller continue to raise
concerns about a growing budget deficit.
The Greater Houston Partnership, the city's business association, released a policy paper last month saying the city's structural deficit is one of its “thorniest challenges,” and one that must be solved. The partnership did not consult with Turner or his finance department in drafting the report, angering the administration.
The mayor said Wednesday he took issue with anyone who tried to discredit finance director Will Jones and the finance department’s reputation.
“Let me just say, the sky is not falling,” Turner said.
Both Turner and Jones lambasted the report for factual errors. They pointed to what they argue are overly conservative sales tax projections, a misleading analysis on Turner's landmark pension reforms and the city's net position.
Jones said last week the report was "embarrassing," and Mayor Pro Tem Dave Martin suggested the partnership should stick to its core mission of attracting businesses.
The partnership, though, and Controller Chris Brown's office have argued forcefully that the deficit will present a clear challenge for the next administration. Quibbling about the numbers will not change that core finding, the partnership has suggested.
“We spent a lot of time yesterday arguing about the report,” Brown said last week. “I liken that to we’re arguing about the speed at which the car is heading toward the cliff. The issue is we are heading toward a cliff.”
Brown, who is term limited and could not seek re-election, told the council he was just trying to help those who will still be here in 2024.
“I’m not doing this because I’m trying to gin up votes,” he said. “Quite frankly, there’s not a lot of people who even click on what I put out because no one pays attention to this kind of thing. But they should because these are the important issues that are going to affect this city, I believe, for the next years and decades.”
While the partnership made some corrections to the report Friday, its officials have stood by its stance that the city faces a “structural budget imbalance” that will need to be addressed by the next mayor.
The top contenders for the job, state Sen. John Whitmire and U.S. Rep. Sheila Jackson Lee, will head to a runoff Dec. 9.
The Greater Houston Partnership did not have any comment on the mayor’s Wednesday statements, spokesperson Brina Morales wrote in an email.
Disputes over deficit
There is no dispute Houston has operated at a financial deficit for decades, usually of about $100-160 million. It often closes those gaps with one-time measures, selling off city-owned land or deferring maintenance costs. In especially bad years, it has resorted to layoffs.
About $600 million in federal COVID-19 relief money has saved the city from closing those gaps on its own in recent years. Turner has used the funds to build up the most robust cash reserves the city has seen in decades, but Brown and others have criticized him for also using the one-time funds for recurring expenses that will stay on the books after the federal money runs out. That includes pay raises for all city workers in recent years.
Former Mayor Annise Parker, who oversaw layoffs in 2012, has described the city's financial state as a "fiscal cliff" as well, predicting more layoffs will be necessary.
Turner, who was absent from last week’s council meeting, said Tuesday that it took “everything in [his] power” to contain himself after listening to the meeting.
“For eight years that I have been mayor, for eight years, the controller has said the sky was falling,” Turner said. “It almost seems as though he wishes the sky was falling.”
Turner added the controller’s projections have historically been wrong. For example, while Jones’ sales tax projections have been spot on, he said, the controller’s projections were off.
Turner said credit rating agencies – which he said he values more than the controller – identified pensions, post-employment benefits and the revenue cap as the city’s structural hurdles.
The city has addressed all but one of those hurdles, he said: the city’s revenue cap.
That cap has prevented the city from collecting money, Turner said, noting a state law the Legislature approved in 2021 limiting the annual revenue growth of cities and counties also added complications.
“Now if you want to complain to anybody, go to Austin,” Turner said.
The city’s revenue cap, which was first adopted in 2004, restricts how much additional money the city can take in from property taxes each year. Houston first hit the cap in 2015 and has since lost $1.8 billion in revenue – cutting its tax rate in nine out of the last 10 years.
“There are a lot of things I don’t know,” Turner said. “But budget, I do know. Numbers, I do know.”
Turner didn’t understand why someone could be wrong for eight years but be more credible than him.
“I don't care how much money we need to leave to the next mayor, whoever that mayor is,” Turner said. “If you don't know how to manage, you're going to be in trouble.”
Brown told the Chronicle Wednesday that what unfolded at the council meeting was “political theater.”
“The mayor this morning said exactly what I had been saying for many years – that without federal funds, we would've had to make significant cuts,” Brown said. “And after those federal funds run out, that structural imbalance will remain… and we will hit the fiscal cliff.”
When that happens, Brown said that the only lever the city has to pull is the layoff one.
Brown suspects Turner’s highly passionate defense Wednesday may have just been an act of a departing politician.
Turner’s second term comes to an end this year, he said, “but unfortunately, the next administration is going to have to deal with the problems that were created during this administration.”
Still, Turner maintains it’s important he protects his legacy.
“The people will rewrite your story right in front of your eyes … I have not been perfect, but when it comes to the financial management of this city, we have done extremely well,” he said.