Thinking outside the box on the city’s finances

We’ve seen the ideas generated by the Long Term Financial Management Task Force, which I thought lacked a certain amount of breadth to its perspective. Here’s a taste of what else might be out there to think about.

Good Jobs Great Houston, of which the Houston Organization of Public Employees is a member, held a news conference outside Wednesday’s City Council meeting to get their own ideas out. They claim that some of the ideas they had submitted to the Task Force did not make it onto the draft list. Among the union’s ideas distributed Wednesday:

  • Raise the city’s tax rate;
  • Establish a higher property tax bracket on homes with a value exceeding $500,000;
  • Establish a 1 percent income tax on city residents who make more than $30,000 a year;
  • A “blight tax” on foreclosed homes that banks would pay on vacant properties they let deteriorate;
  • End the practice of double dipping — remaining on the city payroll while collecting a pension;
  • Put a cap of $100,000 a year on annual pensions for new hires;
  • Review all outsourced services to see if they can be done more efficiently in house.

There are a lot more, but the Good Job Great Houston and HOPE officials said they want the conversation to include more than what’s already on the Task Force’s 229-item draft list.

As with the LTFMTF, some of these ideas are more practical than others, and some cannot be done without legislative input, possibly even a Constitutional amendment. I’ve been an advocate of rolling back the miniscule property tax rate cuts that were implemented during the Bill White years – the savings for an individual household is minor, but the cumulative revenue for the city adds up. You do have to be aware of the limitations imposed by the revenue cap, however – even if you wanted to, you can only raise the tax rate so much before that would kick in.

I really like the idea of the “blight tax”, as I want to see more thought given to generating growth here inside city limits. The city has been admirably aggressive under Mayor Parker to condemn and demolish derelict properties – Patricia Kilday Hart wrote about a new tool in their chest for that – but it’s only half of the equation. You still have to get someone to build or rehab or otherwise do something useful with the property afterward, and as far as I can tell we’re still short on ideas there.

And if we’re going to go after blight, let’s aim for the biggest target out there – abandoned buildings downtown. There are properties downtown that have been derelict for decades, and that’s some of the most valuable real estate in the city. Some of these buildings are within a couple of blocks of the Main Street light rail line, and would make excellent mixed use/transit oriented projects, if only they could or would be used for something. Do we not have the tools to make something happen, or have we just not put enough effort into it? I don’t know, but I wish we’d put more thought into it. The same is true for other empty or blighted lots along the existing rail line, and the ones that are now being built. There’s been quite a bit of development in the Main Street corridor, but there’s room for much more. If the secret to making Inner Loop housing less expensive is to generate more of it, then these are the places to start. What are the obstacles, and what can we do to overcome them? This needs to be part of the long term financial conversation.

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2 Responses to Thinking outside the box on the city’s finances

  1. Fernando says:

    Mr. Kuffner ,you stated, “I really like the idea of the “blight tax”, as I want to see more thought given to generating growth here inside city limits”. I frequently hear people say we need more growth inside the city limits but they rarely state their objective. What would you like to see achieved by increasing the urban population—more tax payers for the same city services? Increase property values? Something else? Just wondering.

    Continuing on this subject…you said you really like the idea of banks paying on vacant properties they let deteriorate due to home foreclosure. So banks are to assume a risk by giving someone a loan, then if the person skips on the payments, the bank not only loses on the loan, but could also be taxed as the property they don’t want begins to deteriorate. Hmmm…sounds like the cost of a home loan could increase.

    Tax Increment Reinvestment Zones (TIRZ) are tossed around pretty freely so perhaps a TIRZ could do what it’s supposed to do instead of placing a new special tax on banks. TIRZ’s are supposed to address blight and a few other special circumstances. I guess Memorial City and Uptown don’t quite fit into the blight category; therefore, they must be considered a special circumstance. And then there’s the used-to-be empty acreage located at West Orem and South Post Oak–just empty fields…no blight, yet this was approved as a TIRZ. And our leadership just created the 23rd TIRZ to pay for the Metro Light Rail underpass on Harrisburg.

    Taxpayers are already paying (in more ways than one) for TIRZ’s, maybe we could use TIRZ tax dollars to deal with the blight they’re supposed to address anyway.

  2. Pingback: The Long-Range Financial Management Task Force report is out – Off the Kuff

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