Houston’s $5.7 billion budget for the next fiscal year includes a big jump in revenue from water bills, raises for all city employees and the largest unspent reserves in years.
City Council voted 15-2 to adopt Mayor Sylvester Turner’s proposed budget Wednesday after working through more than 100 amendments pitched by council members. Councilmembers Mike Knox and Michael Kubosh were the lone no votes. The budget takes effect when the new fiscal year begins July 1.
Dozens of amendments were ruled out of order after the mayor cracked down on proposals he said dealt with matters outside the budget. Only 16 amendments won approval, and just four actually moved money or enacted a practical change. The rest merely directed departments or the city to “study” or “explore” or “assess the opportunity” of new ideas, with no requirement to adopt or implement them.
“Over the last few years I’ve been very lenient. When I see that leniency being abused, I exercise my authority,” Turner said at the beginning of the meeting. “Now, I’m calling it as it should have been called…. I’m not going to be here all night on non-budgetary amendments.”
The approved budget relies on $130 million in federal COVID-19 relief money and a $100 million spike in sales tax revenue to close deficits and help the city pay for previously announced pay raises. It also reserves $311 million for the future, when the city may face larger deficits as the federal funding runs out.
The most notable consequence for residents will stem from water bill rate hikes previously passed by council last year. Revenue from water and wastewater bills increased by 9 and 20 percent from a September hike, and again by 7.5 and 11 percent from an increase in April.
The rates vary by customer type, meter size and usage, but the bill for a customer who uses 3,000 gallons of water went from $27.39 before the hikes to $37.18 after the April increase. The rates will continue to rise every April through 2026.
As a result, the budget passed Wednesday included a 23 percent increase in water revenue, from $1.2 billion to $1.5 billion. That $280 million accounts for much of the $487 million increase in this year’s overall budget. The bulk of Public Works’ budget comes from that water revenue, a so-called “dedicated fund” where the money must be spent on water infrastructure and service.
The $3 billion general fund, which is supported by property taxes and other fees and supports most core city services, marks a $240 million increase, or 9 percent, over last year. Most of that increase pays for raises for firefighters (6 percent), police officers (4 percent) and municipal employees (3 percent).
More than half of the general fund supports public safety, with the $989 million police budget taking the largest share of resources. The fire department’s budget is $559 million.
The budget does not include a property tax rate increase. Turner has said he also plans to increase the exemption for seniors and disabled residents, although such a measure has not yet reached City Council.
See here for the background. In regard to the water rates, I will remind you that the city is as of last year under a federal consent decree to “spend an estimated $2 billion over the next 15 years to upgrade its troubled sanitary sewer system”. The story doesn’t mention this, but the money is for that purpose, and if it’s not used for that purpose we’ll be dragged back into court. As for the rest, I’m glad we’re building the reserve back up, I suspect we will be needing it again soon.