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Controller Concerned about Red Ink

Houston City Controller Annise Parker has good news and bad news when it comes to revenue. In her monthly report to City Council, parker says her office is projecting an operating shortfall of 38-million dollars. The good news…that’s about 14-million dollars better than the month before. Pat Hernandez has more.


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Controller Parker says the city’s financial picture is better than at other times during the recession, even with an operating deficit for this fiscal year.

“An operating deficit simply means that we are spending more money than we are taking in. The budget was balanced by the use of savings — something that’s happening to a lot of the folks who are listening to this right now. Maybe they’re working less overtime; maybe they’ve been cut back on their hours — they dip into their savings. The city did the same thing.”

While several major departments that provide essential services had to cut their budgets, city council budgets managed a slight increase. The proposed 4-billion dollar spending blueprint also shows an operating deficit, but at least it’s balanced, thanks to reserve funds. That worries Parker because there is no cushion.

“It is a concern in the sense of, as we draw down reserves, how long is this recession gong to last, and will there be money there in the future? We build up reserves in order to be able to weather problem periods, and the reserves have been at very healthy levels, but with the proposed budget that will draw the reserves down to the level below, which we’re not allowed to go.”

Parker says she keeps council informed about the sales tax, which is 30-percent of the city’s revenue stream.

“The reason that our operating deficit is not as large as has been anticipated, is that the sales tax has stayed strong. Our analysis says that people are still spending Ike insurance money. What happens when that money runs out? We’re being very conservative as we budget for next year.”

The new budget must be adopted by July first.

Pat Hernandez, KUHF…Houston Public Radio News.

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