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Houston gets to have a boring budget

Thanks, President Biden and all you voters in Georgia!

Mayor Sylvester Turner

Mayor Sylvester Turner plans to use an influx of federal cash to give firefighters a “raise the city can afford,” expand the Houston Police Department and replace lost revenue from the COVID-19 pandemic, according to the mayor’s $5.1 billion annual spending plan.

Turner’s budget proposal relies on roughly $304 million in federal relief money that was set to be deposited into the city’s coffers this week. The administration would use $188 million of that money to close most of the city’s projected $201 million deficit for the upcoming fiscal year, while fully replenishing the $20 million rainy day fund ahead of hurricane season.

“Without this flexibility, the city would be facing catastrophic cuts across all services,” Turner said, a nod to the city’s estimated $178 million in lost revenue during the pandemic, mostly driven by sales tax.

The proposed spending plan largely would leave the city’s $214 million in reserves, which officials have relied on in recent years to help balance the annual budget, untouched. Turner also did not account for $112 million of the city’s stimulus funds in his initial spending plan, leaving the door open for other initiatives that he declined to detail Tuesday.

A portion of the extra federal aid likely will cover the firefighter raises, which Turner did not include in the budget as proposed Tuesday. The mayor declined to reveal the size of the firefighter pay increase, saying only that he plans to implement raises over three years, starting July 1, when the 2022 fiscal year begins.

[…]

Without the firefighter raises, Turner’s spending plan represents a 4.7 percent increase from last year’s budget. The tax- and fee-supported general fund, which pays for core city services, would total $2.58 billion next year, up 3.9 percent. The largest increase would come from the police department, which would see its budget rise to $984 million, about $33 million more than city officials expect to spend this year.

The additional police spending would fund six cadet classes instead of the usual five, and cover a 2 percent raise for officers. The city’s contract with police officers has expired and the two sides have not agreed on a new one, but an evergreen clause in that deal secured the raise. The raise accounts for $11.7 million of the added funds.

The Houston Fire Department also would see a modest budget increase, with funding for four cadet classes. The initial $515 million HFD budget includes funding for 3,648 classified firefighters, according to city finance officials, about 76 fewer than the current budget.

For now, the two public safety departments account for roughly a quarter of the mayor’s proposed budget for the next fiscal year and half the general fund costs.

Controller Chris Brown said the federal stimulus money bailed the city out of a truly dire scenario — Houston’s worst-ever deficit, which could have resulted in as many as 2,500 layoffs.

“I’d breath a sigh of relief and look at the fact that the city really dodged a bullet this budget cycle,” Brown said, adding that his biggest concern is the city’s continuing structural imbalance. Its recurring expenditures outweigh revenues, meaning the city usually has to employ stop-gap measures such as land sales and deferrals to balance its books.

See here and here for the background. It’s hard to remember now, but a year ago things were looking really bad. The CARES Act helped, but the American Rescue Plan provided more money with fewer strings attached. It also provided money for the next fiscal year, by which time hopefully the city’s sales tax revenue will have bounced back. Not having this money would have made the next budget so much worse than it was in 2010. We still have challenges ahead, but at least the hole didn’t get exponentially bigger.

(As for the increase to the police budget, well, I didn’t expect anything different. Here’s hoping the Lege fails to carry that ball across the goal line.

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