The Greater Houston Partnership has released their second white paper, “Is Now the Time to Raise Property Taxes?” The partnership’s last paper, which outlined the economic crisis Houston currently faces, was met by heavy scrutiny from Houston Mayor Annise Parker and Controller Ron Green. That attack wasn’t so much based on fact as it was a knee-jerk response – defending the legacy of Houston’s highest term-limited officeholders.

Their most recent paper details the Bayou City’s revenue sources and directly conflicts with Parker and Green’s narrative that ‘it isn’t a spending problem, rather it is a revenue and pension problem.’ Unsurprisingly, the President of the Houston Firefighters’ pension board says that pensions aren’t the problem, it’s spending.

This may come as news to them all, but it is both a spending and pension problem.

The Greater Houston Partnership’s report discredits the dozens of arguments made by city officials for the removal of the floating revenue cap. It explains that in the last four years, Houston’s property tax revenue has increased by roughly $210 million, which equates to a 5.6 percent increase per year. In FY15 the city projected a collection of $1.073 billion in property taxes, which is a 97 percent increase since the year 2000. Much of this can be attributed to the steady rise of appraisal values. 

One thing often ignored is that the current crisis Houston is facing would have come earlier, but city officials have been kicking the can down the road via asset sales and other one-time fixes. It’s common sense that those kinds of approaches will not sustain the city long-term, which is why spending needs to be controlled. The fact that pension reform is dominating much of the discussion this election cycle is certainly a step in the right direction, but unfortunately the fact of the matter is that action on that front is limited until the Legislature is back in session. What the city does have immediate control over, however, is spending.

The partnership’s report concludes saying, “The solution must principally come from a focus on expenses, including limiting or eliminating the rapid growth in pension expense and unfunded liabilities.”

The level of avoidance coming from those whom Houstonians employed to manage the city’s finances is astounding. The administration blames the same voters who hired them for approving a revenue cap, and blames the pension board for astronomically high benefits, while the pension board blames the administration for not fully funding the pensions. Until officials can stop trying to deflect blame for the current problems and address the real core of Houston’s fiscal woes, the Bayou City will continue hurtling towards a worsening financial crisis.

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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