Chris Hollins
Houston might need to make some policy changes to ensure that the city has enough money on hand to provide disaster relief as storms become more frequent and more expensive to recover from, Controller Chris Hollins’ office warned Tuesday.
The Bayou City was pummeled by two of the top 10 most expensive storms in history by Hurricane Harvey, which caused $160 billion in 2017, and Ike’s $43 billion of damage in 2008. More recently, Houston had to contend with Hurricane Beryl and a derecho in 2024.
Because the city is spending more money than it is bringing in, the controller’s office warned that leaders may need to consider raising its minimum fund balance, increasing the size of its stabilization fund, dedicating its budget surpluses to the stabilization fund at the end of the year or directing its clawbacks to the stabilization fund, he said.
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The fund balance has historically been used in Houston to help foot the bill for budget deficits instead of holding onto it for potential disasters. When compared to cities like San Antonio and Dallas, Houston keeps less money on hand in its fund balance.
Houston requires 7.5% of the general fund on hand, and typically has anywhere between 8% and 9%. Dallas, on the other hand, keeps anywhere from 19% to 20% of its general fund budget on hand, and San Antonio keeps 15% to 16%. Miami, which tied with Houston for disaster risk, keeps around 20%.
Governors Finance Officers Association best practice, Jones noted, is keeping 16.7% on hand at all times.
San Antonio and Dallas both bolster their budgets with a trash fee, which Houston does not have but officials have considered for years. They also both have smaller budgets and general funds than Houston.
A copy of the Controller’s report, called “Weathering the Storm: Houston’s Financial Preparedness for Natural Disasters”, is here, and the press release that announced the report is here. I don’t know how many times I can say that Houston’s financial problems are mostly about lack of sufficient revenue without crossing into full-blown crankery, but I’m here to say it again anyway. The two simplest things we can do about that – not the easiest, but the simplest – are revise or remove the stupid revenue cap and impose a trash fee like every other damn city does. You can make of all that what you will, I’m going to stand on my porch and stare into the middle distance for few minutes, while pondering again how lucky we are to not have any major weather events this year. So far.