Federal relief offers Houston way to avert fiscal disaster—for now

Image description
The American Rescue Plan Act's $615 million for Houston will stave off a potentially disastrous budget season, Controller Chris Brown said. (Courtesy City of Houston)
A $615 million influx of federal funds will help Houston stave off a potentially disastrous budget season, Houston Controller Chris Brown said.

The dollars are part of the American Rescue Plan Act, a federal aid package that in part aims to help cities make up for lost revenues from decreased sales, property and other tax revenues impacted by the COVID-19 pandemic.

“The timing of this is very good because we were facing a challenging budget cycle,” Brown said.

The city’s fiscal year begins July 1, preceded by months of preparation among city staff. Around the same time last year, the city received a boost from the Coronavirus Aid, Relief, and Economic Security Act, but the bill prohibited cities from using the funding to fill revenue shortfalls. Instead, local officials were instructed to put the money toward expenses directly related to the COVID-19 pandemic such as testing sites, personal protective equipment, and business and rent relief.

To avoid sweeping furloughs and layoffs that were potentially necessary because of revenue shortfalls, Mayor Sylvester Turner assigned city employees to check temperatures of visitors and fellow employees at city facilities. For every day employees would have been furloughed, they were reassigned to check temperatures instead.


“This time around, there’s a lot more flexibility,” Brown said.

With the new federal aid package signed into law by President Joe Biden on March 11, Turner is permitted to plug holes in the budget. As the end of the fiscal year approaches, the city is expected to face a $150 million gap, the largest in recent history and rivaling the 2008 Great Recession.

Although the new bill has less rigid requirements for how cities can spend funds, the way Houston uses its share could either put it in a better or worse position when it runs out, Brown said. The funds will be disbursed over two years.

If Turner allocates it toward any recurring expenses such as salaries and benefits for new hires, the city will be on the hook for increased spending long after the federal aid runs out, he said.

“We definitely need citywide to add more positions, but the challenge is if we add those, they become recurring expenses every year,” he said.

Although most of the funding is not spoken for yet, Turner told reporters March 14 that he plans to write a sixth cadet class for the Houston Police Department into the next budget, an increase from the typical five classes.

Instead of using the funding on new employees or other recurring expenses, Brown said the dollars would be better spent shoring up liabilities such as the pending Proposition B lawsuit filed by the Houston Firefighters Association. In it, plaintiffs argue because of ongoing pay disputes between the city and the union, firefighters will be owed years of back pay by the time the disagreements are settled. The city has estimated it could owe the department over $100 million by the end of the conflict.

“Now we find ourselves with a large influx of cash. If we could use some of that to help mediate the dispute with the firefighters, we won’t be stuck with a big bill down the road that could financially harm the city,” Brown said.

The growing costs of post-employment health benefits are also burdening the city considerably, Brown said. Setting up a trust with the federal aid to ease the debt would also improve the city’s financial standing, he said.

“I’m excited about having this money and not having to deal with this year’s budget gap, but I’m also understanding that it could potentially delay and even increase the severity of the budget gap by 2024,” Brown said. “It comes down to how you use it.”
By Emma Whalen
Emma is Community Impact Newspaper's Houston City Hall reporter. Previously, she covered public health, education and features for several Austin-area publications. A Boston native, she is a former student athlete and alumna of The University of Texas at Austin.


MOST RECENT

Two restaurants will be coming to Blossom Hotel Houston in early 2022. (Courtesy Blossom Hotel)
Blossom Hotel Houston announces 2 new restaurant concepts

Check out which restaurants will soon come to Blossom Hotel Houston.

Consuelo Mendez Middle School has consistently received poor ratings from the Texas Education Agency. (Community Impact Newspaper)
CI TEXAS ROUNDUP: State could take over AISD school board if poorly-rated campus does not improve; new furniture store to open in McKinney and more top news

Take a look at the top five trending stories across Community Impact Newspaper’s coverage areas in Texas as of Dec. 3.

Julia De Leon, a Harris County Precinct 3 resident and essential worker, spoke Nov. 30 at commissioners court in favor of establishing the Harris County Essential Workers Board. (Emily Lincke/Community Impact Newspaper)
Harris County creates board for essential workers during ongoing pandemic

Local essential workers will now be given a voice to improve working conditions during the ongoing coronavirus pandemic after the Harris County Essential Workers Board was established during the Harris County Commissioners Court session Nov. 30.

Although it is still to be determined how much funding trickles down to Houston from the $1.2 trillion Infrastructure Investment and Jobs Act, signed into law by President Joe Biden Nov. 15, city officials are looking to be prepared for when new competitive grant programs open up and start taking applications. (Courtesy Fotolia)
Here is what the Infrastructure Investment and Jobs Act could mean for Houston

Although it is still to be determined how much funding trickles down to Houston from the $1.2 trillion Infrastructure Investment and Jobs Act, signed into law by President Joe Biden Nov. 15, city officials are looking to be prepared for when new competitive grant programs open up and start taking applications.

With pandemic rebound underway, HISD looks to future

With a lot on the line this school year, Houston ISD has worked to reconnect with students and fill teacher vacancies.

The school board will consider whether to call a special election to fill the vacancy or make an appointment. (Zara Flores/Community Impact Newspaper)
CI TEXAS ROUNDUP: Hays CISD to hold special meeting on resignation of board member; Montgomery approves plan for downtown and more top news

Take a look at the top five trending stories across Community Impact Newspaper’s coverage areas in Texas as of Dec. 2.

Zoo Lights is a light show within the Houston Zoo that happens every year. (Courtesy Houston Zoo Lights)
10 holiday light displays to see in the Greater Houston area

Check out these nine free and ticketed displays to see through December and January in the Houston area.

Mendocino Farms, a fast casual restaurant known for its wide-ranging and seasonally inspired menu options is slated to open in the M-K-T Heights development Dec. 14. (Courtesy Mendocino Farms)
Mendocino Farms set for Dec. 14 opening in the Heights

A fast-casual restaurant known for its wide-ranging and seasonally inspired menu options is slated to open in the M-K-T Heights development Dec. 14.

Tomball City Council approved a development agreement with Lovett Industrial for 240 acres at Hwy. 249, Rocky Road Nov. 29. (Anna Lotz/Community Impact Newspaper)
CI TEXAS ROUNDUP: Tomball City Council approves development of 240 acres at Hwy. 249, Rocky Road; JLB Eatery coming soon to Katy and more top news

Take a look at the top five trending stories across Community Impact Newspaper’s coverage areas in Texas as of Dec. 1.

HCSO Assistant Chief Mike Lee presents information on the county's new safety policing initiative Nov. 30. (Emily Lincke/Community Impact Newspaper)
Harris County approves $2.6M program to fight violent crime in unincorporated areas

“We are strategically pinpointing and then attacking crime, and the best part of it is we are doing it hand in hand with the community,” Judge Lina Hidalgo said.