More than 700 Houston city employees have accepted a retirement incentive ahead of the April 28 deadline. Houston Mayor John Whitmire offered the incentive as part of his plan to address the city’s $330 million budget deficit.
The program, announced in March, targets about 3,000 eligible employees, providing a one-time payment of 25 percent of their annual salary and five years of employee benefits.
At a meeting of the Houston City Council’s budget and fiscal affairs and labor committees, administration officials said they expect 25 percent of eligible employees to accept the incentive. The city would pay $21 million upfront while saving more than $47 million per year.
The incentive, part of a larger strategy to manage workforce levels, comes amid significant challenges facing the city’s financial outlook.
Last month, Whitmire ordered a hiring freeze for the city and expanded an efficiency study—that has already found fraud, waste, and abuse—to include Houston Public Works and the Controller’s office.
Meanwhile, overtime costs for the police, fire, and solid waste departments are expected to exceed the budget by $72 million. Officials blamed the excess overtime on staffing issues. Employees in the police and fire departments were not offered retirement buyouts.
The retirement program is viewed as a method to trim operating costs without resorting to across-the-board layoffs.
City officials emphasized that this measure is part of a broader strategy to address the budget deficit without cutting services. Management indicated that plans to reallocate resources and recruit for critical roles are already under consideration.
Mayor Whitmire’s Deputy Chief of Staff Steven David said that the program was available to about 3,000 employees who were already eligible for retirement. “We believe that they earned this,” he said.
“Fiscal Year 2026 is a fiscal year of change,” he added. “The expectation for directors is that they will submit a restructured budget.”
