A legal standoff over drainage payments has stalled Houston’s budget, even with a payment plan already in place.
In February, Houston Controller Chris Hollins warned that he would be unable to certify Mayor John Whitmire’s proposed budget unless the city either cut major services or found new sources of revenue.
Earlier this month, Mayor Whitmire unveiled a revised $7 billion budget that avoids tax or fee increases for residents and instead relies on the city’s existing reserves to cover a $107 million shortfall. The plan hinges on departmental consolidations and a voluntary retirement initiative championed by the mayor.
While overall expenditures in the proposed budget are up 2.3 percent compared to last year, only General Fund spending falls under the direct control of city officials—and that portion is down 2.4 percent, or $74 million.
Now, Hollins says he will refuse to certify the new budget altogether until the courts rule on a payment agreement stemming from an ongoing drainage lawsuit. In January, the Texas Supreme Court declined to hear the city’s appeal in the case, leaving in place a lower court ruling that requires Houston to invest hundreds of millions of dollars into street and drainage improvements.
Whitmire responded to the Supreme Court ruling by reaffirming his priorities: “Public safety and infrastructure have always been my priorities and the reason I ran for mayor. I was aware of the pending lawsuit from 2019 that I would inherit, and I knew it would impact our budget. This will allow us to collaborate with other levels of government and require a continued examination of all city operations to find cost savings, which is part of my commitment to eliminate waste, duplication, and corruption. Let’s go to work.”
The budget proposal currently being held up already includes a payment plan designed to comply with the lawsuit’s requirements. The court’s pending decision concerns only whether the plan satisfies the terms laid out by the Texas Supreme Court.
When contacted by Texas Scorecard, the mayor’s office referred questions to a statement from City Attorney Arturo Michel.
Michel explained, “The motion is before the court. Both parties consider it sufficiently routine that it is presented without requesting a hearing. Counsel for Mr. Jones and Mr. Watson will contact the court after it has had a short opportunity to confirm that this is the preferred mechanism for the court to consider it.”
Michel also pushed back on the controller’s position, stating he “disagrees with the Controller’s position that a court order is a condition that must be met before the budget is complete for certification purposes. The parties have a binding agreement that has received all City and plaintiff approvals.”
It remains unclear how the budget process will proceed. For now, it appears Hollins intends to withhold certification until the court officially rules on the adequacy of the payment plan—although both the city and the plaintiffs have already approved the agreement.
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