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After inheriting a mess, Houston mayor introduces budget with no new taxes, fees

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(The Center Square) – Houston’s new Democratic mayor, John Whitmire, is continuing to reverse the actions of his predecessor, from prioritizing fighting crime to ensuring no new taxes or fees are included in his first proposed budget.

Whitmire proposed a $6.7 billion budget Tuesday that includes no new taxes or fees, doesn’t reduce services and closes a $160 million deficit. It is larger than some state budgets.

“I have only been mayor for five months, and I inherited a mess, which at the time was a projected budget gap of $160 million heading into FY’25,” Whitmire said at a news conference with city council members. “The Fiscal Year 2025 Proposed Budget is my first budget, and a large financial challenge is ahead. While we were able to close the budgetary gap using a combination of recurring expenditure reductions and a draw on fund balance, we know there is much more work to do ahead of us.”

Whitmire addressed “years of the city’s financial deficits” he says he inherited. His plan includes implementing city-wide efficiencies and a cost savings review.

Like his Democratic counterpart in Dallas, Mayor Eric Johnson, Whitmire is prioritizing efficiency and limiting increasing taxes. Unlike Whitmire, Johnson was unsuccessful at convincing his city council to not raise taxes and switched parties to become a Republican. Johnson and Whitmire both argue city governments can be more efficient and the answer to budget problems isn’t always increasing taxes.

The majority of the largest cities in Texas with the greatest taxpayer burdens are run by Democrats, led by Dallas and Houston.

While Whitmire’s budget doesn’t create new taxes or fees, it also doesn’t cut spending. His proposed $6.73 billion budget for all funds is $442 million more than fiscal 2024, a 7% increase.

The budget increases account for prioritizing funding for public safety staffing including paying for five cadet classes for the Houston fire and police departments that have suffered from staffing shortages. It also follows through on a campaign pledge to residents in Texas’ largest city plagued by crime and limited or failing public services.

His proposed fiscal 2025 general fund budget of $3.03 billion represents a 2.1% increase from the fiscal 2024 budget of $2.97 billion. The increase accounts for covering a 3.5% pay increase for Houston police officers and increases associated with the collective bargaining agreement he reached with the Houston Fire Department. The agreement was reached after Gov. Greg Abbott signed a bill into law that Whitmire sponsored while he was in the state legislature.

Within less than two months of being in office, Whitmire reversed an 8-year battle between his predecessor and HPD’s union by negotiating an historic agreement.

After learning of Houston Police Department’s failure to investigate more than 264,00 crime reports, Whitmire appointed an independent panel to oversee HPD’s internal investigation. Within two months of doing so, HPD’s chief was forced to resign.

Going forward, Houston is facing many challenges, Whitmire said. “While we are looking for efficiencies and cost savings, we cannot discount the fact that we are under strict limitations on our revenues.” Houston has three revenue constraints “that do not exist in other large cities in Texas,” he said. They include a locally imposed revenue cap in addition to the state cap, no dedicated revenues to support solid waste operations, and no support from a city-owned utility.

His plan also includes working with “other levels of government” and “adjust[ing] how we deliver services and the costs required to do so and discuss reasonable potential modifications to our revenue model.”

The city council must approve the budget before July 1, when the new fiscal year begins.