First and foremost, no layoffs.
Houston and Harris County are expected to receive more than $1.5 billion through the stimulus bill approved by Congress Wednesday, providing a massive cash injection that city officials say will help close a budget shortfall widened by the pandemic for the second year in a row.
The measure provides local governments with their most generous round of COVID-related funding yet, and it comes with fewer spending restrictions than last year’s aid. Houston will receive an estimated $615 million, putting the city at more than $1 billion in direct federal relief during the pandemic, while Harris County is projected to receive $914 million — more than double its allotment from the first round of local aid last March.
“I’m hopeful and optimistic that we will be able to use this money to, essentially, bail the city out of a very dire financial situation,” said City Controller Chris Brown, who monitors the spending of Houston’s more than $5 billion city budget.
Local governments will receive half their federal aid within 60 days of Friday, when President Joe Biden will sign the bill into law, according to White House press secretary Jen Psaki. They will receive the second half of the funds at least a year later.
That means Houston will receive more than $300 million to offset its revenue losses next fiscal year, along with any potential shortfall before the current fiscal year ends June 30. [COVID recovery czar Marvin] Odum said the city finance department is projecting a budget gap of between $160 and $200 million next year, while Brown — whose office generates its own estimates separate from Turner’s administration — said he expects the shortfall to be even higher.
Brown noted that while finance department projections assume the city will see a less-than-1 percent reduction in sales tax revenue this year, the actual decrease has been 7 percent.
“The (Turner) administration, I don’t think, has properly evaluated the reductions in sales and property tax,” Brown said. “There’s a $40 million variance between us and (the) finance (department) in sales tax alone.”
Brown estimated city officials will have to lay off about a dozen city employees for every $1 million trimmed from the budget, meaning Houston could have been looking at more than 2,000 layoffs without any federal aid.
Instead, Houston’s relief will far exceed its budget deficit. The city also is expected to devote a chunk of the aid to direct COVID relief, such as testing and vaccinations. Turner’s administration exhausted the previous round of aid, totaling $405 million, in December. Those funds covered contact tracing efforts, city workers whose jobs were consumed by COVID, and relief to renters and small businesses, among other areas.
As the story notes, the ARP aid comes with fewer restrictions on how the money can be used than the CARES Act did, though the city was able to plug its deficit last year with those funds as well. The need for more funding has been known for a long time, and it’s only happening now because of the Presidential election and those two Georgia Senate runoffs. Elections have consequences, y’all.