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Budget Task Force Says City’s Financial Outlook Is Dire

Houston city coffers will be exhausted by 2014 unless the city's leaders make drastic and difficult changes to pensions, taxes and services. That's according to a specially-appointed task force that handed over its report today to Mayor Annise Parker.


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The Task Force spent five months taking a hard look at the city’s financial health.

Chairman Mike Nichols says that if nothing is done, the city’s credit rating will be downgraded and the city could risk financial disaster. And the problem is far too big to be fixed simply by forcing departments to operate more efficiently.

“There were no magic bullets. There were no ‘a-ha’ moments to say if we could just do this, everything would be fine. And worst of all, there are no easy solutions.

The task force presented more than 100 ideas for cutting services or raising revenues. They included outsourcing ambulance services, having Harris County take over libraries and public health, and taking one firefighter off each truck sent to a scene.

The task force did not consider whether the ideas were feasible or politically viable. For example, some of the ideas were a city income tax of  1 percent, new property taxes on homes worth $1/2 million or more, and a fee for garbage pick-up.

“None of these choices are easy and each one will attract a great deal of opposition. But the alternative, and I believe this, is financial disaster of the type some cities in America and states are already enduring, but which Houston has avoided thus far.”

Under one worst-case scenario, in twenty years the city will accumulate a deficit of more than $11 billion if nothing changes.

Mayor Parker agreed with Nichols that pension costs represent the biggest liability in the city’s budget, and will have to be reduced, somehow.

“In order to deal with a structural problem, you have to deal with the biggest costs. You can spend a lot of time nibbling around the edges, but you have to deal with the biggest costs. And health benefits — rationalizing health and pension costs have to be discussed.”

Some council members, like Wanda Adams, cautioned that city workers should not bear the brunt of the coming changes.

But others cheered the task force and said the time had come for a reckoning.

Jack Christie is a councilman at large:

“This is the tipping point, can we make the hard decisions and have the spinal stature to keep this government on a financial sound basis? I think you have the council and the mayor that’ll do it.”

The work of the task force is now done. It will be up to the mayor and council to decide which recommendations to implement.

The next annual budget will be voted on in June.