With an increase of $487 million, Turner’s proposal amounts to a 9.3 percent increase over FY 2022.
During a press conference this week, Turner said while revenues had increased the city faced financial challenges related to COVID-19 and public safety.
“Fiscal Year 2022 experienced increases across many revenue streams as our local economy outperformed all expectations,” said Turner. “However, make no mistake, COVID-19 is still here and continues to impact our communities.”
Acknowledging the financial demands of rising crime in the region, Turner said the current police force consists of 5,117 members, but his budget funds another five cadet training classes for both police and firefighters in FY 2023. It will also cover pay increases of 4 percent for police and 6 percent for fire department employees next year, with additional raises phasing in over the next few years.
Houston’s 2022 projected sales tax revenues increased by nearly $100 million from 2022 and are projected to top $806 million by the end of June. Turner also noted that property appraisals are projected to increase enough to trigger the city’s cap on property taxes.
Approved by voters in 2004, the cap limits annual property tax increases to either 4.5 percent or the combined rates of inflation and population growth.
Due to property tax valuations increasing by 20 percent or more this year, Turner promised to propose increasing the exemptions for the elderly and disabled from $160,000 to $260,000 in 2023 but he lamented the inability to extract more revenue from property owners.
“In 2023 alone, the full impact of the cap will result in the loss of $282 million because of the revenue cap that exists,” said Turner. “Since hitting the cap in Fiscal Year 2015, the full cumulative impact of the revenue cap is $1.4 billion. Now, let me just say, we could’ve done a great deal, even with police, with fire, solid waste…if those dollars were made available.”
In presenting the budget to the city council, Turner emphasized that he would not permit any budget amendments that involved policy changes.
“If there are policy amendments, I will move them out of order and they will not be discussed,” warned Turner. “Once I rule them out, the discussion is over.”
Houston’s governing charter invests extensive power with the mayor to control the city council agenda and budget creation process. If the mayor rejects an agenda item, three of the 16 council members can call for a special meeting, but at least nine members must attend that meeting to make quorum requirements.
Last year, Councilmember Edward Pollard successfully introduced an amendment to restore funds available to district council members Turner had slashed from $1 million for each of the 11 city districts to $750,000.
Councilmember Amy Peck told The Texan she has been studying Turner’s proposed budget, but already has at least 40 budget amendments planned. In the past, Peck has suggested conducting a sunset review for all programs and city spending but was rebuffed by the mayor, so this cycle she is considering a more targeted approach.
“The good thing about sunset review is that it brings in stakeholders and Houstonians so we can hear what the community needs as well,” said Peck, explaining that the review process could eliminate duplications or identify antiquated equipment or programs and lead to more efficient and cost-effective city spending.
Peck noted that she and several other council members have allocated portions of their district services funds to help cover overtime or equipment costs for the Houston Police Department.
Since Peck has attached a fiscal note to each of the amendments she will offer, she does not believe the mayor will rule them out of order including a policy shift.
Using the ARPA funds to cover shortfalls in the mayor’s budget will also allow the city to increase reserves to $311 million.
Earlier this year the city’s elected controller Chris Brown warned that Houston could face a budget deficit of as much as $300 million once federal COVID-19 relief funds expire.
Last year, the city used $182 million in federal funds from ARPA and the Coronavirus Aid, Relief, and Economic Security (CARES) Act to temporarily balance the books, and Brown cautioned against use for ongoing expenses.
The phased-in 18 percent pay raise for firefighters draws $115 million in federal funds over three years, but if the courts side with firefighters in long-pending litigation, the city may have to provide five years of back pay and pension expenses. Although Brown declined to estimate the cost, he says the amount would be “substantial” and union leaders have suggested the cost could exceed $162 million for each year of back pay and pensions owed.
Last year, the city council voted 12 to 4 to implement a water and sewer rate increase to be phased in over five years, resulting in an overall increase of 78 percent. The additional funds are designed to help cover a $2 billion settlement with the U.S. Environmental Protection Agency regarding Houston’s aging and leaking sewer system.
Although Turner is a member of the advocacy group Mayors for Guaranteed Income, his budget does not appear to include any direct funding for a guaranteed basic income program like the one approved in Austin earlier this year.
Once approved by the city council, the new budget will take effect on July 1, 2022.
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Holly Hansen is a regional reporter for The Texan living in Harris County. Her former column, “All In Perspective” ran in The Georgetown Advocate, Jarrell Star Ledger, and The Hill Country News, and she has contributed to a variety of Texas digital media outlets. She graduated summa cum laude from the University of Central Florida with a degree in History, and in addition to writing about politics and policy, also writes about faith and culture.