I’m still trying to figure this out.
Mayor John Whitmire
Mayor John Whitmire proposed a $7 billion budget Tuesday for fiscal year 2026, closing a projected $220 million deficit without implementing new fees or taxes for residents.
The proposal pulls $3.03 billion from Houston’s general fund, with roughly 58 percent of that going toward the police and fire departments, in line with an approved contract with the firefighters union and a proposed contract with the police union.
Whitmire’s team said it made cuts without sacrificing services for residents by consolidating teams, eliminating vacant positions throughout city departments and offering voluntary retirement buyouts to municipal employees.
More savings will come from efficiencies identified by accounting firm Ernst and Young and potential contributions from the state and county governments, Whitmire said.
“I will also emphasize, we’re not through,” Whitmire said at a Tuesday news conference to unveil the spending plan. “We will be implementing the reorganization of this city government as we go forward. We’ll continue to collaborate with other levels of government, but we will also make certain that we listen to Houstonians.”
If approved as presented, the total budget would increase by $160 million compared to the current year, but general fund spending would go down $74.5 million. The unallocated fund balance remaining in the general fund, however, is projected to decrease by more than $100 million compared to the current budget.
City officials have projected a $220 million deficit for the fiscal year that begins July 1, due in part to storm debris cleanup costs and a $1.5 billion contract and backpay settlement with the Houston firefighters union. That shortfall briefly swelled to more than $300 million after the city lost a lawsuit over its drainage spending. The Whitmire administration since has worked out a settlement with the plaintiffs.
City Controller Chris Hollins must certify the city has enough money to fund the proposed budget before City Council can approve the plan prior to the July 1 start of the new fiscal year. Hollins issued a statement that his office will begin a “thorough review” of the proposed budget.
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City Council will consider the contract in the coming weeks. At-Large Councilmember and Finance Committee Chair Sallie Alcorn said she generally was supportive of the proposed contract with the HPOU, but she also anticipated the city would eventually have to go to the voters for additional revenue to pay for the three contracts.
The city regularly bumps up against local and state mandated revenue caps, limiting the amount it can bring in from property taxes. The natural disasters last year made it possible for the city to increase the tax rate regardless of the revenue cap, but Whitmire rejected calls to increase revenue before implementing the recommendations from the Ernst and Young citywide efficiency study.
The voluntary retirement buyouts for municipal employees contributed the highest amount of savings to reduce the deficit, Whitmire said.
Whitmire Chief of Staff Chris Newport said the administration also found savings by eliminating vacant municipal positions, moving duplicative civilian departments in the police department within the city of Houston, combining 311 call centers and consolidating high-cost contracts.
City Council’s Finance Committee will meet Wednesday after the full council meeting to learn more about the proposed budget from the finance director. Elected officials will hold town hall meetings over the next month for residents to ask questions about the budget.
Whitmire’s budget will first appear on a City Council agenda May 28.
See here for more on that efficiency study, which I noted at the time didn’t cite actual savings numbers. Maybe that was all being held in reserve for The Big Budget Reveal Day, I don’t know. There are a lot of numbers being thrown around in all of the stories I have seen so far, and I can’t quite tell what they’re all supposed to mean.
Here’s Houston Public Media.
More than $7 million from the neighborhoods department, $1.8 million from libraries and more than $4 million from health — those cuts are among the $289 million in slashed general fund spending from fiscal year 2025 to 2026, according to a proposed budget document presented Tuesday by Houston Mayor John Whitmire.
“The savings are going into the services,” Whitmire told reporters at a news conference, promising the city will still provide “the services that Houstonians expect and deserve.”
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The city is expected to save about $30 million in general fund spending annually after more than 1,000 municipal workers accepted early retirement buyouts last month at an upfront cost of $11 million. Whitmire said the city will go through “reorganization” as the city looks for efficiencies, “but this budget does not anticipate laying off folks.”
“We don’t take anything off the table, but that would be the very, very last thing that I do,” Whitmire said. “I do not anticipate it. It’s not in our plans.”
Whitmire said the budget is “balanced” with “no deficit.” The document presented by the administration, however, showed a gap of $107 million between projected revenue and expenditures. That would require tapping into the city’s fund balance — essentially a savings account which is projected to hold $380.8 million at the end of the current fiscal year.
Pressed for clarification, Dubowski and Whitmire’s chief of staff, Chris Newport, in a statement again described the budget as “balanced” and a “major improvement” over the fiscal year 2025 budget, which called for a $275 million draw-down from the fund balance.
While the majority of city departments would see cuts to spending, the fire department would receive an additional $23 million in funding, the police department would add $67 million to its budget, solid waste would receive an extra $1.4 million and the housing department would get an additional $346,000.
Whitmire said the city will also spend about half a billion dollars on drainage and street repairs, though the document presented on Tuesday showed $1 million in general fund spending for the Houston Public Works department — down from $23 million last year. Taking into account all funding sources, the department’s overall budget last year was $3.26 billion. According to a spokesperson with the department, its overall budget will increase by $180 million to $3.4 billion.
Look at that first paragraph, where it says “$289 million in slashed general fund spending” from last year to this year. But the single biggest item within those cuts cited in the story is the $30 million the city will save from the employee buyout package. But that comes with a cost attached to it, as the early retirees get a severance payout as they exit, so I’m not sure what the net savings is. As for the seven million here and four million there, it’s gonna take a lot of those line items to get anywhere close to $289 million.
Now, we do have the city’s press release, which cites “a decrease in spending of $74.5 million” from last year. That’s a number I can believe, but it still doesn’t address what all those other numbers are doing, and it’s a long way from the $200 million-plus that is the current deficit. Thus, there’s also that little bitty footnote of how there’s still a $107 million gap between revenue and expenditures – a funny way of being “balanced”, but never mind that for now, I presume that’s coming from the cash reserves and they would rather not dwell on it. All the budget data is here, and I have not clicked on any of those links. Maybe my questions are all answered in a neat and tidy way if I do bother to read through it all. I think I’ll wait to see what Controller Hollins and the rest of Council have to say.
One more curiosity. The Landing story says that “58 percent” of the general fund spending goes towards police and fire. HPM says that police and fire “represent nearly 60%” of the general fund spending. Okay, fine, they preferred to round to a whole number, whatever. But the Chron story says “Around 54% of the city’s general fund will go toward public safety”, and I’m sorry, you can’t make all three of those numbers line up. I’m sure there are some subtle differences in how each reporter did the math – what exactly goes in the numerator and the denominator is going to be somewhat subjective – but it just contributes to the unruly whirlwind of it all. Let’s add a few of the specific figures that story cites:
The city’s fire department will operate with a $659 million budget, while police will get more than $1.1 billion.
The city departments with the highest level of 311 complaints – Solid Waste Management and Houston Public Works – have proposed budgets of $101 million and $1.16 billion, respectively. Public Works only has a portion of its budget covered by the general fund. The rest of its cash comes from water and sewer fees.
The city’s Public Works department saw the largest monetary cut at more than $21.8 million.
David said the cut was due to an accounting move. Cash used for streetlights maintenance was transferred into the city’s drainage charge fund for the new fiscal year.
The department with the largest cut from the general fund by percentage is the Department of Neighborhoods at 48%, leaving its officials operating with less than half the budget it had last year.
In 2025, neighborhoods had around $14.4 million of its budget supplemented by the general fund. This coming year, they’re projected to only have less than $7.5 million from the general fund.
Newport said the department’s cut resulted from consolidating code enforcement into the Public Works department. Neighborhoods previously housed residential code enforcement, while Public Works tackled commercial properties.
Yes, also remember that these cuts, however much they actually are, have been promised to not lead to any degradations in service. As with the rest of it, we’ll see.
I’ve said multiple times along the way towards this budget that we can’t cut our way out of the deficit, we need to increase revenue to truly address the underlying issues. The Mayor has again chosen not to try that. I will just note that even with these cuts, there’s still that $107 million gap between revenue and spending, and next year we’ll be spending more because of the drainage settlement; the deal there deferred payments but didn’t reduce them. That bill is yet to come due. Something’s still gotta give. For now, we wait and see what everyone else has to say.
It is not a balanced budget when you spend more than you bring in.
If eliminating people of retirement age is efficient, why doesn’t it work for police and fire?
I will assume that overtime for police and fire will be the same, but the salary increase will cost the city more.
Good thing those pesky prior mayors gave Whitmire such a large rainy day fund to keep digging into.
Most complaints are neighborhood problems, so let us cut money there to solve the problem. Their solution is to write back that the problem was solved when it wasn’t. But this will cause people to quit calling, as it wastes time. That is what is happening in my neck of the woods. Of course, Whitmire will claim that the problems are down.
I wish there was a camera mounted high in the COH Mayor’s office as well as the office where these budget numbers are coming from. I heard about it endlessly, but can’t say I’ve ever actually seen monkeys f’in a football.