Houston homeowners will be able to get a glimpse of how their property taxes may or may not change for the next fiscal year during an Oct. 9 Houston City Council meeting.

The setup

Due to the city experiencing two disaster declarations in 2024—one for the derecho in May and one for Hurricane Beryl in July—city officials are uniquely positioned to raise the property tax rate for FY 2024-25 without seeking voter approval.

Houston accrued approximately $53 million in clean-up costs from the two national disasters, according to a Sept. 9 Budget and Fiscal Affairs Committee presentation from Houston Finance Director Melissa Dubowski. The city would need to raise its property tax rate by at least 3.2 cents per $100 valuation to cover that cost without needing to cut from the budget, according to the presentation.

However, Houston Mayor John Whitmire said he has little interest in raising property taxes until all other options to increase revenue or cut costs are explored. Some council members disagree and are advocating for raising the property tax rate to cover the cost of the disaster without cutting expenditures.

What are the options?

The divide has resulted in two different tax rate options that will be brought to the table during the Oct. 9 regular City Council session, according to an agenda packet for the meeting.

Whitmire and Dubowksi are pushing to keep the tax rate the same as last year at $0.51919 per $100 valuation. On the other hand, members of the council's Proposition A Committee are proposing a rate of $0.5516 per $100 valuation, a 3.2 cent increase and one of the tax rate options presented by Dubowski in September.

Council members who submitted the alternate proposal include Letitia Plummer, Joaquin Martinez, Mario Castillo and Sallie Alcorn, who has been a staunch supporter of raising the tax rate in recent discussions.

According to the letter, council members chose the proposed rate because they feel it is fiscally responsible. If adopted, the rate would:

• Require no expenditure cuts in FY 2024-25
• Allow the city to raise enough revenue to cover the estimated local share of disaster recovery costs

The $0.5516 rate would not generate any additional cash flow for the city, according to the packet. In contrast, Whitmire's proposal would:

• Create a $46 million shortfall
• Require the city to cut $86 million in expenditures to cover the shortfall and the local cost of the disasters

Next steps

The council will need to decide Oct. 9 on which tax rate proposal will move forward before the public hearing is held at 9 a.m. Oct. 16. Council has until Oct. 28 to adopt a new rate.