Once again relying on federal money, Mayor Sylvester Turner’s proposed $5.7 billion budget for next year would pay for raises for all city employees, offer tax relief to seniors and disabled residents, and sock away the largest reserves in years for savings, according to an outline Turner shared Tuesday at City Hall.
The city often faces nine-figure budget deficits, forcing it to sell off land and defer costs to close gaps. For the third consecutive year, though, the city will rely on hundreds of millions of dollars in federal COVID-19 relief money to avoid a budget hole and free up other revenue for the mayor’s priorities.
The city is set to receive more than $300 million this year from the most recent stimulus package approved by Congress, and Turner has proposed using $160 million in the budget. The city has received more than $1 billion in such assistance over the last three years.
City Council is expected to propose amendments and vote to adopt the spending plan next month. The budget will take effect on July 1, the start of the next fiscal year.
With about $311 million in reserves, Turner is establishing the healthiest fund balance the city has seen in decades, which he called necessary given the uncertainty of rising inflation, the continuing COVID-19 pandemic and the Russian invasion of Ukraine.
The city budgeted $205 million in reserves last year, the first time it exceeded $200 million in reserves since 2009. The city’s financial policy calls for an unassigned reserve worth 7.5 percent of the general fund; this year’s amount is nearly double that, 13.5 percent.
That money also will help the next mayor and council confront budgets when the federal assistance runs dry and the city must fend for itself, Turner said. The relief funds must be obligated by 2024 and spent by 2026.
“I think what we all recognize is that some of the major cost-drivers will be driving this budget for the next several years… I don’t want to put future mayors and council members in a worse position,” Turner said. “As the city weans itself eventually off the (federal) funds, you’re going to be back with the fund balance.”
You can see a list of things in the proposed budget herer. HPD, HFD, Solid Waste, and Parks and Rec all get increases. We’ll see how spicy the amendments process is.