Houston controller: City’s revenue losses will be more extreme than budget predicts

The finance department’s projections place the ending fund balance at 7.15%, 5 percentage points higher than Brown’s prediction. Overall, Brown's figures show general fund revenues $88.5 million less than what the administration's proposal anticipates.

During last year’s budget cycle, which was marred by a different financial crisis brought on by the city’s ongoing firefighter pay raise dispute, Brown’s projection of the ending fund balance was just 0.9% percent lower than the city’s projection.

For FY 2020-21, Brown’s predicted loss of 9.96% sales tax revenues due to coronavirus shutdowns, the oil downturn and a slowing economy is the main driver of the fund balances’ losses, he said. The mayor's proposal used an assumption of a 0.74% decrease in sales taxes.

An estimate halfway between his and the city’s finance department, Brown said, would put the fund balance at $80 to $90 million total, leaving little room for additional losses in the next year, when property tax declines will be felt more acutely.

“If we see a 10% decrease in property tax revenues, that would be $120 million reduction,” he said. "So if we have a $120 million loss in revenue and we only have $80 or $90 million left in our savings account, where's the money going to come from?”

A budget hearing is slated for June 3 and a vote by City Council is expected June 10.