From the outside, Houston appears to be a model metropolis, with commercial growth throughout the city, relatively inexpensive housing (for a large city), and a young population taking advantage of the rapid job creation. But behind the veil lies a different Houston, one with the city approaching record high debt totaling hundreds of millions of dollars, an overvalued housing market reportedly heading towards a bubble, and an administration that doesn’t exercise transparency and shows little regard for the needs of the taxpayers.

Year after year, Houston has taken in higher revenue in both its general and enterprise funds. In fact, Houston’s revenue has increased by 56% in the past 13 years. These increases come from higher property appraisals, increases in rain and sewer taxes, and a growing tax base as more people move to the Bayou City. With such substantial revenue increases, how could the fourth largest city in the nation be cash-strapped?

City officials will have you believe that they balance the city’s budget every year. While this may technically be true, the means by which they accomplish this is troubling. Houston officials go to great lengths to cover their deficit by borrowing funds, using reserves, and selling off city owned land. While that may work now, how long will it be until they run out of assets they can liquidate to cover their bills?

Instead of prioritizing the items in the budget and funding what is important, Mayor Annise Parker chooses her own approach.

Parker, along with candidates vying for her position, argue that the city needs to grow its coffers by way of altering or removing the voter-imposed tax revenue cap. Mayor Parker has repeatedly claimed that without a change in amount of revenue the city can collect from taxpayers, core services like the Houston Police and Fire Departments would be unable to operate at full capacity. What the city officials  don’t seem to understand is that the financial problem afflicting Houston isn’t due to lack of revenue, it’s due to a lack of fiscal responsibility and restraint.

These officials often neglect to inform taxpayers about the revenue each council district receives for Tax Increment Reinvestment Zones (TIRZ).

The property tax revenue in these zones is specifically exempt from the city’s revenue cap, and some of the most funded TIRZs receive upwards of $100 million in revenue. The money is then spent in their respective districts for economic development.

These zones benefit the affluent areas of the city while leaving impoverished areas at a standstill. Without the necessary tax base, there are little funds to “reinvest” in underdeveloped areas, leaving them as a financial burden to the city.

Instead of seeking ways to reduce unnecessary taxing and spending, officials are pushing Houston closer to the cliff. The city council’s accountability to Houstonians will be tested in the coming weeks when the Ad Hoc Charter Review Committee discusses the property tax revenue cap. If they move forward with their intention to repeal it, it will send a clear message to taxpayers that they have no intention to address the growing financial mismanagement prevalent throughout city hall.

Charles Blain

Charles Blain is the president of Urban Reform and Urban Reform Institute. A native of New Jersey, he is based in Houston and writes on municipal finance and other urban issues.

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