Mayor Whitmire’s first budget includes no new taxes or fees

Houston Mayor John Whitmire on Tuesday unveiled a $6.7 billion budget plan that will go to the City Council for a vote almost at the same time as a proposed deal with the firefighters’ union, as part of a key test of the new mayor’s power.

On the campaign trail, Whitmire regularly declined to offer specific budget proposals, telling voters he needed to “look under the hood” of the city’s finances before proposing solutions to Houston’s growing budget deficit.

Tuesday’s budget presentation represented the first round of Whitmire’s proposed repairs, which slow the city’s spending growth from last year but don’t include any revenue increases from ideas floated in recent months, such as a garbage tax or a property tax increase.

A non-negotiable for Whitmire’s campaign was resolving the contract dispute that had pitted the city against the fire department for years, and the proposed budget would allow him to go all the way.

However, as the budget shows, there are immediate and long-term costs to this deal. In its first year, the city would spend $30.6 million on back pay bonds and $10 million on higher training assignments and pay for firefighters.

The combination of back pay and settlement payments will cost the city between $70 million and $80 million in its first year.

In doing so, the deal will drain the historic balance of more than $460 million the city expects to have at the end of this fiscal year on June 30. Whitmire’s spending plan calls for the city to finish the next fiscal year with $280 million remaining.

Whitmire’s budget does not specify how he plans to pay the firefighters’ settlement in the years to come. His office has floated the idea of ​​raising property taxes or imposing a waste tax to help finance the deal, both of which could draw backlash. Whitmire continued Tuesday to allude to the proposals as potential sources of needed revenue, but did not advocate for them in the budget.

“We have a lot to do, but I would ask my colleagues to help us use 2025 as a path to 2026,” Whitmire said. “Everything is on the table. We’re going to listen to Houstonians, we’re going to see where the cost savings have taken us, and then we’re going to make some tough decisions. We have no choice.”

Houston firefighters in the spotlight

The mayor’s proposed budget funds a bureaucracy of more than 20,000 city employees in departments ranging from the Houston Police Department to the Office of Cultural Affairs.

However, the most anticipated part of this budget was the funding for the firefighter deal. When Whitmire announced the deal in March, he shared its overall $1.5 billion cost without explaining how he would finance it.

The spending plan unveiled Tuesday shows Whitmire will rely heavily on the balance of funds left by former Mayor Sylvester Turner to pay for the first year of the settlement, which covers back pay through 2017 and salary increases through ‘to the financial year 2029.

Whitmire did not immediately propose major new revenue streams, which observers warned were needed to address the city’s structural imbalance even before the mayor approved the costly deal.

“We recognize that we have financial challenges,” said Chief Financial Officer Melissa Dubowski. “These challenges are something we will face in FY25 to prepare for FY26.

Along with the Houston Fire Department, Whitmire promised to strengthen the ranks of the Houston Police Department. The mayor is proposing to increase the department’s budget by about $77 million, on top of $1 billion in the current year.

The additional money will go toward 3.5 percent pay increases for officers and five classes of cadets., according to the administration.

Houston’s police union is expected to begin contract negotiations with City Hall next year.

Whitmire made it clear that additional revenue would soon be needed, but he declined to answer when asked what options he was considering. He previously proposed a waste tax and a “public safety exception” to the city’s property tax revenue cap.

“We don’t have time to list them, but all of the above,” Whitmire said.

Whitmire also suggested the city could raise additional funds from the state next year, citing its decades-long relationship with state leaders in the Texas Legislature.

The Houston Civil Servants Organization, for its part, is already negotiating its next contract with the administration. The union group, which supported Whitmire last year, represents city non-public safety personnel.

Next year’s proposed budget does not include raises for city employees outside of the police and fire departments.

To cut or not to cut

As budget season approaches, Whitmire has asked departments — except police and fire — to suggest 5 percent budget cuts to ease the city’s budget crisis.

The budget unveiled Tuesday is a mix of cuts in some departments, reflecting an $11.7 million decrease in departmental spending thanks to identified efficiencies, Whitmire said. Public works would grow 14.3 percent under Whitmire’s plan, the overburdened solid waste department would see its budget shrink by 4.3 percent, and the parks and recreation department — which Whitmire has often said lack of appropriate equipment – ​​would decrease by almost 11 percent.

At-Large Council Member Sallie Alcorn, who chairs the council’s Budget and Fiscal Affairs Committee, endorsed Whitmire’s approach of targeting wasteful spending across all departments before moving to revenue-generating measures. revenue, such as garbage fees or increased taxes.

“I think the public needs a closer look before moving on to new income,” Alcorn said.

The City Council is expected to begin holding hearings on the budget Wednesday, and meetings will continue into next week.

Drainage Requests

Outside of City Hall, Whitmire faces growing legal and political pressure to spend more on infrastructure projects, such as roads, pipes and sewers.

The advocacy group West Street Recovery asked Whitmire to spend an additional $45 million on a ditch restoration program, $20 million for local drainage projects and $20 million for private sewer diversions.

In comments to the City Council last week, Beth Lumia, the group’s co-director of disaster preparedness, noted that 73 percent of residents said last year they wanted the next mayor to address emergency needs. city ​​infrastructure. She also noted that Whitmire and many council members had promised to increase infrastructure funding.

“It’s not an attack, it’s just a reminder of your word,” she said. “Mayor Whitmire, your top concern is public safety, as we heard today. Mine is too, but you have to understand that infrastructure that saves lives in times of flooding is part of Houston’s public safety.

As advocacy groups put pressure on Whitmire, two engineers have waged a parallel battle in court. In 2019, engineers Bob Jones and Allen Watson filed a lawsuit against the city to stop it from diverting property tax revenue intended for a fund dedicated to roads and drainage.

Voters approved the fund in votes in 2010 and 2018, but the city never funded it as much as its backers envisioned. Last month, an appeals court said the city must fully fund road and drainage projects going forward.

Whitmire’s administration said it would appeal, citing the potential impact on the police and fire budgets, which account for the lion’s share of the city’s general fund revenue.

Jones, one of the engineers, estimates the city would have to spend an additional $100 million a year on roads and drainage to comply with the 2018 charter amendment. He said the city would have to accept the will of the voters instead of trying to delay the court’s final decision with another appeal.

“I think the city is hoping to push the final budget day,” Jones said last week. “Whether they face this problem this year or whether they face it next year, they should face it.”

Whitmire’s first budget does not fully fund road and drainage projects. The mayor said the city will meet with attorneys representing the plaintiffs on Wednesday to discuss a settlement.

Whitmire said he has known Jones for 40 years and hopes he can reach a deal beneficial to the city.

“Relationships matter, experience matters,” Whitmire said. “The plaintiffs in the lawsuit…they care about the city of Houston. They care about my administration.

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