The outdoor New Year's Eve celebration was a relatively new addition to the city's line-up.
Susan Christian is the director of the Mayor's Office of Special Events. She says they could not secure the more than half a million dollars in sponsorships needed to put on the celebration.
"We've been diligently working all year to secure the proper funding in order to produce the event, and it just wasn't forthcoming. While we do have sponsors who are still talking to us about next year, we just could not get the commited sponsor dollars that was necessary to produce an event of this magnitude for this year."
The city has promoted the New Year's Eve party as a family-friendly celebration.
Christian says the local economy for sponsored outdoor events is still soft and the city is looking for corporations that will provide multi-year support.
"Houston traditionally has not had a large outdoor event at New Year's that had any sustainability. They're very costly events, we do not have a strong tradition for this New Year's event, and so it takes a commitment for a number of years."
Last year's event featured fireworks, a glowing art car parade and concerts.
More than 10,000 people showed up to the free event at Discovery Green Park, before heavy rains drove many away.