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

Houston Controller Chris Brown, who serves as an independent check on the city finance department, painted a much darker picture of Houston’s reserves than as projected in the city’s proposed fiscal year 2020-21 budget.

Brown’s annual trends report presented May 20 suggested that Houston’s savings could dip to a historic low of 2.1% of maintenance and operating expenses by the end of Fiscal Year 2020-21, falling well below the 7.5% threshold required by city financial policies. The balance can dip below 7.5% only in the event of economic instability beyond the city’s control, the policies state.

“I don't like having this talk about disastrous financial consequences for the city,” Brown said. “But I feel like if we don't have it now, in 12 or 18 months, we're going to be having the same meeting and you all are going to say, ‘why didn't you tell us that it could be this bad?’”

Brown’s projection of the city’s $45 million ending fund balance, a de facto savings account for the city, is $108 million lower than the projection used by the city's finance department to form the proposed FY 2020-21 budget, which already calls for 3,000 furloughs and other cost-saving measures.

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.


Houston Mayor Sylvester Turner's police reform task force is gathering more community input. (Courtesy Adobe Stock)
Police reform task force asks Houston residents to share opinions through Aug. 9

The Houston Mayor's Task Force on Policing Reform is circulating a survey among Houston neighborhoods to collect opinions from residents.

An online training course to help prepare Houston ISD parents for the virtual return to school is set to go live Aug. 10. (Courtesy Canva)
Houston ISD to launch parent educational course on virtual learning Aug. 10

The district is asking parents to complete the course by Sept. 4.

The 2020 U.S. Census response rate is already lagging behind 2010 numbers, and officials said the shortened timeline only increases the chances of an undercount. (Community Impact staff)
Shortened census timeline could shortchange Houston, its most vulnerable communities

The 2020 U.S. Census response rate is already lagging behind 2010 numbers, and officials said the shortened timeline only increases the chances of an undercount.

The farm-to-table restaurant plans to create 90 jobs and offer familiar American meals. (Courtesy Whiskey Cake)
Whiskey Cake restaurant to open in The Woodlands and more Houston-area news

Read the latest business and community news from the Houston area.

The overall death total in Harris County hit 805, with the majority of deaths—78%—occurring in individuals ages 60 and older. (Community Impact staff)
Harris County coronavirus count: 17 deaths confirmed Aug. 5, including man in his 20s

The overall death total hit 805, with the majority of deaths—78%—occurring in individuals ages 60 and older.

Restaurants in Houston can now opt to take up to 50% of its designated parking spaces to create outdoor dining space as long as COVID-19 restrictions remain in effect. (Matt Dulin/Community Impact Newspaper)
Houston restaurants can now tap parking lots for outdoor dining

Houston City Council has approved a proposal to allow restaurants to take over 50% of their parking spaces to expand outdoor dining capacity.

Another $20 million in relief will be available soon for Houston residents struggling to pay rent. (Community Impact staff)
Houston OKs $20M in rent relief with provision to delay evictions

The new funds will also be prioritzed to the most vulnerable residents rather than a first-come, first-served process.

The Confederate Soldiers Monument stands on the south grounds of the Texas Capitol. A group of Democratic lawmakers have called for its removal, along with other statues and portraits honoring the Confederacy. (Jack Flagler/Community Impact Newspaper)
State legislators seek removal of Confederate monuments at Texas Capitol

The decision may ultimately lie with Gov. Greg Abbott and the rest of the State Preservation Board, which last year authorized the removal of a plaque in the Capitol that said slavery was not an underlying cause of the Confederate rebellion.

This map shows the corridors that will be subject to new transit-oriented development rules, which are designed to improve access to high-capacity transit options. (Courtesy City of Houston)
Houston adopts new development rules to promote walkable, transit-oriented projects

New development moving forward will have to conform to new standards along transit corridors and new "Walkable Places" areas.