Houston Mayor John Whitmire presented his proposed $7 billion city budget for 2026 on Tuesday.
Whitmire indicated during the presentation that he was proposing a balanced budget. However, budget documents show that General Fund expenses exceed revenue by $107 million. Whitmire intends to cover the deficit with reserves rather than levying new taxes or fees.
Urban Reform Institute President Charles Blain told Texas Scorecard, “Usually, Houston’s budget proposal is a lot of smoke and mirrors and sleight of hand, but what Mayor Whitmire is proposing is incredibly promising to anyone who lives in the city.”
As the city charter requires passage of a balanced budget, officials will consider a budget balanced even when expenses exceed revenue if the city has reserves to cover the gap.
Overall proposed budget expenditures reflect a 2.3 percent increase. However, General Fund expenditures—those that can be controlled by city officials—are reduced by $74 million, a 2.4 percent decrease from last year.
The budget emphasizes infrastructure improvements, particularly in street and drainage systems. Following a legal settlement addressing underfunding in these areas, the city plans to allocate funds to comply with requirements, aiming to accelerate the repair and replacement of aging infrastructure.
“A budget tells us a city’s priorities, and for the first time in a long time, it seems that the taxpayer’s interest was given the consideration it deserves in Houston,” said Blain.
Operational efficiencies are also a focal point, with the implementation of a shared services model for human resources, information technology, finance, and procurement.
These changes, along with a voluntary retirement incentive accepted by over 35 percent of eligible employees, are projected to save more than $99 million annually.
Public safety remains a priority, with $1.7 billion allocated, accounting for 71 percent of expenditures.
“This budget funds the first year of a new police contract that brings our compensation levels in line with other major Texas cities and helps rebuild the ranks of officers needed to patrol neighborhoods and investigate crimes,” said Whitmire.
His proposed budget includes funding for five police cadet classes and nine fire cadet classes.
While some city departments would see cuts to spending, the fire department would receive an additional $23 million, the police department $67 million, solid waste $1.4 million, and the housing department would get an extra $346,000.
General Fund revenue is projected at $2.926 billion, with property taxes contributing $1.460 billion, sales taxes $902 million, franchise fees $146 million, and other revenues $417 million.
The $107 million gap would require tapping into the city’s fund balance, a savings account projected to end the current fiscal year with $380 million.
Blain added that he has followed 10 Houston budgeting seasons, and for the first time, “We’re seeing actual cuts and savings without relying on federal aid, land sales, or tax increases.”
“$74 million of cuts just through a more efficient government, $500 million dedicated to streets and drainage, and the mayor is even cutting his own office’s budget by 10%,” continued Blain.
The budget will undergo extensive review by the Houston City Council, with departmental budget workshops scheduled throughout May.
