The City of Houston approved a $6.2 Billion budget on Wednesday for Fiscal Year 2024 which includes a pay raise for employees, funding for drainage projects, and city-wide initiatives.
In a 15-2 vote, council adopted Mayor Sylvester Turner's last budget as he prepares to exit office next year. Turner rolled out his proposed budget last month, and said he's giving the next administration some financial relief.
At-Large Council Members Mike Knox and Michael Kubosh were the no votes.
The budget is a $379.2 million increase compared to 2023's budget. The city will save $404 million, which is $220 million above the legal requirement. Turner said it’s the strongest fund balance during his eight-year tenure.
"Any Mayor that comes in has to deal with the challenges that come before you," he said. "I had to deal with unfunded pension liabilities that had not been addressed in 20 something years, and a 160 million deficit. I can say that we are leaving the City of Houston as we move forward, in better fiscal shape than when I inherited, now that I can say without doubt."
The FY 2024 budget includes a 3% pay raise for municipal workers, including police, and a 6% raise for firefighters, the third pay raise in the last three years. The Houston Police Department and firefighters make up half of the city's operating budget, with police spending of $1.6 Billion and firefighters, $593 million.
ARBITRATION/STATE LEGISLATION
Council Member Michael Kubosh was concerned about the city’s financial state due to state legislation bills such as Senate Bill 736, sponsored by Houston Democrat and Mayoral Candidate Bill Whitmore. The bill was recently passed in the Texas Senate requiring Houston and its firefighters to go through arbitration to settle their labor dispute.
"When people who are not sitting in these chairs are voting on things that's going to impact this budget, they should be thinking about the impact on the people of the City of Houston and city services," said Mayor Turner. "For anybody to say we have disrespected firefighters over the last seven years, that's a lie."
Turner said the outcome of SB 736 could be a cost to the city's fund balance especially when the city is already operating on a restrictive revenue cap. Voters approved the revenue cap in 2004, and since hitting the cap in 2015, the city has had to lower its property taxes each year – resulting in a loss of over $1.8 Billion. According to Turner, the city is losing $347 million during Fiscal Year 2024 due to the revenue cap.
AMENDMENTS
During Wednesday's council meeting, council members submitted over 20 amendments, hoping for changes within the budget. Mayor Turner showed support for four of the amendments, while many were sent to city committees or withdrawn. Council Member Tarsha Jackson submitted an amendment for $20 million for local drainage projects, a big win for many residents in her district.
"Today is a huge day for District B and our city," said Council Member Tarsha Jackson. "Never before has a city budget dedicated this level of funding to improving our drainage infrastructure. Too many of our residents still haven't recovered from Harvey. We've seen how difficult rebuilding is. It is important that we take as many preventive measures as we can so we lessen the agony of rebuilding."
Alice Liu is with the Northeast Action Collective, an advocacy group that’s been fighting for more funding to tackle flooding. She said her organization is finally being heard.
"I'm just in disbelief," she said. "There were many times throughout this campaign that we doubted the legitimacy of democracy...the fact that we won today is just incredible."
The amendment led Mayor Turner to reversing an old open ditch maintenance policy that makes property owners responsible for maintaining open ditches, which has been a burden on Northeast residents. Turner said 75% of open ditches are located in communities of color and an ordinance is coming to council in the next few weeks which leaves the responsibility to the city once it’s approved.
Other amendments passed were:
- $500,000 to BARC to fund an adoption trailer and three new enforcement vehicles
- Houston Public Library and Harris County Public Library to explore sharing digital services
- $500,000 to address DNA backlog for the Houston Forensic Science Center
CONTROLLERS CONCERNS
The city has worked to bring down the city's debt by achieving a historic pension reform during Turner’s administration that reduced a $8.2 billion liability to $2.2 billion. The General Fund, which is tax-supported, will see a 7.7% increase. The budget will utilize $160 million from the American Rescue Plan Act (ARPA) –funding the city has relied on to not cut costs on city services and employee layoff.
Controller Chris Brown, the city’s Chief Financial Officer told Houston Matters last month, he's concerned about the city's structural imbalance budget when it comes to using one-time financial sources. The ARPA funds that the city has structured into its budget is a one-time generated fund that expires in 2026 if funds are not used.
Turner said in eight budgets, the city hasn't laid off any employees, and in the last year plus, taxes have exceeded what the city budgeted.
"The Controller has not been right on his projections one-single time in eight-years," said Turner. "If you just want to get negative information, fine. But I think the facts speak for themselves."
