The problem with the revenue cap, in two short paragraphs

From the Chron:

The average homeowner has saved a cumulative $436 thanks to the rate adjustments driven by the revenue cap since 2014, an average of $87 per year.

The same adjustments have prevented the city from collecting $533 million than it otherwise would have.

So in return for a negligible reduction in your property tax bill, which you almost certainly didn’t notice, the city of Houston lost over a half billion dollars in revenue over the past five years. That’s more than enough on a per-year basis to bridge all the shortfalls that have been projected, more than enough to cover even the highest-end estimate of what the firefighters’ pay parity proposal would cost, more than enough to hire however many more cops we’re supposed to need, more than enough to make all of the employee pension systems a hell of a lot more stable, more than enough to buy out a crapload of floodplain-located homes, etc etc etc. Amazing what a little thing like $500 million dollars can do, isn’t it? And don’t forget, even though the average property tax cut was small, the biggest share of it went to the people with the most expensive property. (Not to mention, if you’re a renter, you got exactly zero out of this.) This right here is why I hold self-proclaimed fiscal peacocks who favor the revenue cap like a certain former Mayoral candidate I feel no need to name in such contempt. We cannot undo this stupid, harmful policy soon enough.

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21 Responses to The problem with the revenue cap, in two short paragraphs

  1. Manny Barrera says:

    I for one will vote yes on both propositions. Hope the Council Members get some balls and vote to put the CAP on the ballot.

  2. Steve Houston says:

    Charles, while I agree the rev-cap is not saving people very much, your suggestion that without it, all would be well with the world just isn’t accurate. Of all those things you listed on your spending wish list, the additional funds, if spent solely on a particular item, might address a single one of them and only partially. For example, the city predicted over a $100 million shortfall each year due to predicted increased costs. With no rev-cap, that extra money would just about cover it. Or HFD could have had those raises it is demanding, estimates varying but coming close to the same figure. Or it could have paid off some of the pension bonds that are floating around, not even half the cost of the newly issued debt from last year. By itself the sum wouldn’t cover the average cost of half the cops Police Chief Acevedo demands to make his relational community policing model work, their average cost per cop is estimated at around $140k so a hundred million a year really doesn’t go that far.

    You can only spend the money once and if given the chance, don’t we all know large chunks of the money would have to be spent on council member slush funds, pet projects, and items few people want to pay for? But if people are so in favor of repealing the rev-cap, let them start a petition to remove it, I’m guessing the collection of those signatures will take longer than a week even if it would be promised that the signatures would be counted immediately.

  3. Steve, you’re right that it’s still not enough to solve everything. My point is that an extra $100 million per year would have allowed the city to do a lot more to solve the problems it faces. Basically, we’ve spent over $500 million over the past five years giving homeowners a negligible tax cut. If we had been given a choice – if we hadn’t been forced to do that – we would have made different decisions about how to spend that money. We need to remove that constraint on the city.

  4. Manny Barrera says:

    Don’t need a petition, the Council and Mayor, can do it themselves, the Democrats just need to get some balls and start acting like Democrats. The Democrats made this country great in the last century, there was only one good Republican and that was Dwight Eisenhower.

    I don’t understand the pettiness of the police begrudging the fireman something they both used to agree with, pay parity.

    Where was the concern about deficit when the City gave police the last pay raise? Assuming the Controller is correct that pay raise added at least 25 million to what a parity pay would cost.

  5. Jules says:

    I could possibly be persuaded to vote against the revenue cap if the city gave up all 380 agreements, tax abatements and TIRZ.

  6. Steve Houston says:

    Charles, while I happen to agree with you, the counter argument is that the voters made their choice by enacting the rev-cap and anytime someone important throws out the hint of repealing it, the bulk of the comments are to get some tar & feathers. Given that level of public opinion, the logical thing to assume is that taxpayers only want a lesser amount of services (the cynic in me suggests they want Cadillac services at Yugo prices though).

    Manny, due to public opinion about increasing taxes, combined with Houston’s term limits, good luck finding many in office. They know that raising taxes by repealing the rev-cap will be an albatross with them for the rest of their short political careers. As far as the pettiness of the cops, at one of the town hall meetings it was explained like this: “They could have written their petition in a thousand different ways to get what they wanted but they dragged us into it, limiting the chances of ever getting a good raise again. At the same time, most of us don’t have half the pension they have since ours was cut 14 years ago…” (their cuts were bigger in 2004 and most of the legacy cops with better benefits are gone while most of HFD still has a vastly superior pension). As far as your last point, the cops asked for for a lot less and stuck with negotiating while HFD’s union was trying to play catch up; one is far easier to pay for than the other).

    Jules, the city cannot unilaterally terminate those contracts and even if all the TIRZ’s were ended immediately, most of them have taken on so much debt that the city wouldn’t benefit from closing them down. The city would still be responsible for the debt yet would lack the ability to raise taxes substantially until the rev-cap was voted down, emergency exceptions not applicable. If either of the city’s upcoming propositions pass, it will be two years before the city charter can be amended as well.

  7. Jules says:

    Steve, sorry wasn’t clear. No new 380’s or tax abatements, I realize the city can’t just terminate these terrible contracts. TIRZ’s are a big mess – taxation without representation – they should be ended.

  8. Jules says:

    Charles, not sure how much affect property taxes has on setting rent, but if you owned 2 identical properties with identical appraisal values and lived in one and rented out the other, you would pay more property taxes on the one you rented out.

  9. Jules says:

    Charles, not sure how landlords account for property taxes when setting rent, but if you owned 2 identical houses with the same appraised value, lived in one and rented out the other, you’d pay more in property taxes on the rental.

  10. Steve Houston says:

    Jules, I 99% agree since 1) the 380’s and tax abatements are typically so one sided and then the city rarely enforces the provisions, and 2) the TIRZ programs have always been designed to benefit the few over the many. Even when the program was new, their boards were stretching the intent of the legislation and that was long ago.

    On the rental matter, landlords pass on their costs but not always immediately so when they do, the rent increase is usually more than just the extra taxes. But if you lived in one, you would likely take advantage of the homestead provision to get the exemptions and limit increases, the rental wouldn’t have those perks.

  11. Paul Kubosh says:

    Let’s not forget that the city has been able to grow revenue every year. It’s not like they are losing money. They are just losing the ability to get more money

    Just how much money do you liberals want the city to collect.

  12. Bill Daniels says:


    How much ya got?

  13. Manny Barrera says:

    Paul as much money as it takes to have good livable lives for everyone, where we have not good but excellent police protection and excellent fire protection.

    I am sorry that you, Paul, would rather have some murders and rapes go unsolved but save a few dollars.

    I am sorry that you, Paul, would rather have some people die in a fire but save a few dollars.

    If you find your taxes so oppressive Paul you could always vote with your feet.

    Steve I did say ball-less Council Members.

  14. Manny Barrera says:

    As to Bill as long as it does not effect him, I don’t think he cares if people die or murders and rapes go unsolved.

  15. Bill Daniels says:


    Truth time. You’ve mentioned you are over 65, so your Houston city property taxes are significantly lower than everyone else. Maybe you pay zero city taxes, in addition to having your school tax frozen, etc.

    So you talk a big game about, hey, tax people until it hurts so the city can provide quality service, but YOU aren’t the guy having to dig deep to pay those taxes.

    So, do you even pay city property tax? Easy to shame people to give ’till it hurts, from the cheap seats.

  16. Jules says:

    Steve’s point that the homestead exemption not only lowers your taxes, it also caps the appraised value increase makes me realize that not only are renters affected by property taxes, they may be affected quite a bit more than homeowners.

    Also, if renters tend to be poorer than homeowners, property taxes could adversely affect the poor more.

  17. Manny,

    Your assumptions about where extra money would go are wrong. Enjoy your Sunday.

  18. Manny Barrera says:

    Paul how would you know where the money would go? You have no idea that it will not go to make Houston a better city, or maybe solve one more murder or rape.

    Again if you think so poorly of Houston vote with your feet, but then some people like Houston so much they rent apartments so that they can run for City Council.

  19. Bill Daniels says:

    So Manny,

    You paying your fair share? I respect Kuff and others who want to raise taxes, because they will feel the same pain as everyone else. They have skin in the game. How about you?

  20. Bill King says:

    I will point out for the 1000th time that the City does not have a revenue cap, it has a property tax cap and that all the City has to do to exceed that limit is to ask the voters for their approval. Why do you think they have not done that? The City’s revenues have grown an average of 4.5% per year since the property tax cap was implemented.

    You will be hard pressed to convince voters that the City needs additional revenue when it is spending $200 million on bus lanes on Post Oak.

    But I do wish that Council would have the guts to put this on the ballot because the polling indicates it would be defeated by about 70%. At least then we could stop re-litigating this issue and move on to actually fixing the City’s finances.

  21. Carlos Lopez says:

    Get the $$ from TIRZ (Revenues)… which Interestingly enough is not required to be reported. There was a certain Council Member who was sent packing for Exposing city councils’ CORRUPT attempt of MONTROSE/HEIGHTS. im sure you’re familiar with what im referring to….

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