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The city’s budget gap widens

Everywhere you look, it’s bad budget news.

Mayor Annise Parker raised the possibility of furloughs and layoffs for city employees for the first time Wednesday, saying the city’s dire budget outlook will require City Council to consider all available options for closing roughly $110 million in budget gaps during the next two years.

The key to the negotiations, Parker indicated, could be the willingness of the city’s police, fire and municipal employee unions to offer concessions, such as forgoing salary increases.

“If our employees’ groups will work with me to, perhaps, delay some of the statutory increases, we may be able to save jobs,” Parker said. Otherwise, some job losses are possible if City Council determines certain services to be unnecessary.

The mayor, who has indicated that rate hikes for water and sewer usage, as well as other fee increases, may be imminent, emphasized that no budget-cutting strategy was certain because she merely is putting all options on the table for council consideration. So far, however, she has ruled out a tax increase.

[…]

Falling tax revenues are the primary reason for the gap this year. Sales tax collections are roughly $55 million less than anticipated as thousands of Houstonians have lost their jobs, and property tax revenues have plummeted $18 million as home values have declined, [City Controller Ronald] Green said.

In a memo Parker gave to council members Wednesday, she said the primary reason for the budget gap in 2011 is an expected $43 million decrease in revenues and higher expenditures due to mandated salary increases, spikes in health care benefit costs and pension contribution requirements and higher costs for electricity and fuel.

There’s some hope that the sales tax revenues will pick up soon, but that won’t help much for the current fiscal year. I don’t see why there’s such extreme reluctance to talk about maybe rolling back some of the property tax rate cuts that we had in recent years. The effect to individual homeowners would be modest, but the combined amount would be significant. If we’re spending more than we’re taking in, and we have no good options for cutting costs – there’s not much we can do about “mandated salary increases, spikes in health care benefit costs and pension contribution requirements and higher costs for electricity and fuel” – then we need to talk about all sources of revenue, and not just fees. Are furloughs and layoffs really what we’d rather do here? If we’re putting all options on the table, this needs to be there as well. We can still decide to do something else, after all.

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2 Comments

  1. dvanilla1 says:

    She’s in Washington speaking with the president concerning NASA and there situation.

  2. dvanilla1 says:

    She’s in Washington speaking with the President on NASA’s situation.