“Houston is broke,” Mayor John Whitmire explained when laying out the state of the city’s finances at last week’s Houston City Council meeting. 

The city has run an annual budget deficit nearly every year in recent history. While this year is no different, how the administration plans to close the budget gap is. Heading into the July 1 start of the fiscal year, the city is anticipating a budget gap of about $160 million. 

Typically the city runs a gap between $150 and $220 million and has closed it in the past with one-time funding sources like federal relief aid, land sales, and reserve funds. This year, the ideas floated to close it are a trash fee and asking voters to increase the maximum allowable revenue the city can collect under its long-existing property tax cap. 

Adding to the fiscal burden this year will be a $650 million settlement to the Houston Firefighters, which will cost citizens about $36 million annually over the next 20 to 25 years, and a new labor contract with the group costing another $36 million annually for five years. 

While the administration hasn’t explicitly said they would be coming to voters, they have mentioned both the tax rate increase and the trash fee as possibilities. The city’s finance director Melissa Dubowski also mentioned “other property tax enhancements.” 

In a recent interview with a local news station, Controller Chris Hollins said that it’s “very likely” they are looking to the voters in November, and on the trash fee he said, “We’re the only major city in the state of Texas that doesn’t have a trash fee.”

As the administration prepares the fiscal year 2025 budget, they’ve also asked each department, except police and fire, to cut 5 percent across the board from their department budgets. 

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.