The city of Houston began its budget season May 15 with an overview of the fiscal year 2024-25 proposed budget.

Although Mayor John Whitmire said the city was able to balance the budget this year without major cuts and through the use of reserve funds, he warned next year's budget process will bring tougher decisions, including potentially eliminating a locally imposed revenue cap.

The overview

Finance Director Melissa Dubowski gave a presentation that shares the city’s new budget strategy and the mayor’s priorities as well as a breakdown of the proposed expenditures, revenues and property tax rates.

The presentation started with a list of Whitmire’s priorities for the FY 2024-25 budget, which includes public safety, infrastructure, "government that works" and quality of life. Items include:

  • Increasing the number of police officers and firefighters
  • Equipping first responders with the skill to better address mental health situations
  • Repairing the city’s aging water and wastewater systems
  • Reducing traffic congestion and fixing city streets
  • Protecting the laws and ordinances that encourage diversity and equity

Whitmire will invest the largest sum of funds in the “government that works” priority with the FY 2024-25 proposed budget seeing a 9.2% increase from FY 2023-24, followed by an 8.3% increase in infrastructure and 3.6% increase in public safety.

Breaking it down

Dubowski’s presentation includes a general breakdown of the city’s expenditures, revenue sources and property taxes.

Expenditures: The FY 2024-25 proposed budget is $6.7 billion, an increase of $441.9 million from FY 2023-24. The 7% increase in expenditures is due to:


  • A 10% increase to budgeted base pay for firefighters
  • A 3.5% pay raise for police
  • Funds for five police cadet classes and five fire cadet classes
  • Three fully funded pension systems

Revenue: Revenue for the FY 2024-25 proposed budget is generated 50% by property taxes, 32% from sales taxes, and 18% from other revenue sources and franchise fees.

  • The city of Houston’s estimated taxable value is $320.3 billion.
  • There is an increase in property tax revenue of 3.23%, which is $4.5 million higher than FY 2023-24 estimates.
  • The city's homestead exemption will stay at its amount of $260,000.
  • Sales tax revenue is projected to increase by $1.44% over FY 2023-24.

According to the FY 2024-25 city budget released May 14, revenue is projected to be $6.46 billion and expenditures are estimated at $6.73 billion, leaving a gap of about $270 million.

Quote of note

“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 fiscal year [2024-]25," Whitmire said. "The fiscal year [2024-]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.”

Looking ahead

Whitmire noted in a May 14 news conference the city will not raise taxes or reduce city services in FY 2024-25, but said all options are on the table for following years.

Whitmire said his administration will be looking for efficiencies and cost savings, and may even look for ways to eliminate the existing revenue constraints imposed on the city of Houston, including:

  • A locally imposed revenue cap on top of the state cap
  • No dedicated revenues to support solid waste operations
  • No support from city-owned utilities

Despite the financial challenges confronting the city of Houston in FY 2024-25, Whitmire said he remains encouraged regarding the city’s outlook.

"Houston is a great city with a bright future,” he said in the release. “We will seek to partner in new ways with other levels of government, adjust how we deliver services and the costs required to do so, and discuss reasonable potential modifications to our revenue model.”

Learn more

The city is expected to conduct a series of town hall meetings throughout the budget process to hear feedback from residents and answer questions.

Budget workshops started May 15 and will continue with department overviews through May 28. The new fiscal year begins July 1.