Harris County Commissioners took a look at a preliminary budget for the 2017-18 fiscal year at a special meeting this morning. The new fiscal year begins March 1.
Here are the top points of discussion that came up during the meeting.
Population continues to grow in Harris County
Even through the economic slowdown brought on by a slumping oil and gas industry, population in Harris County still increased by 80,000 people. Over the past five years, the population has increased by more than 500,000, Harris County Budget Chief Bill Jackson said.
“This means we have a lot of additional services to provide,” he said. “About 75 percent of that growth [last year] was in unincorporated areas.”
By 2020, the population in unincorporated Harris County is expected to overtake the City of Houston, Jackson said.
General fund revenues down 2 percent, but county still fiscally strong
A preliminary report from the Harris County auditor shows a 2 percent decrease in general fund revenues for 2017-18 compared to last year. However, the county maintains a strong balance sheet with cash balances projected to hit $927 million by March 1, Jackson said.
“When I took over, [our cash balances] were at negative $30 million, so we’ve come a long way in five years,” Jackson said.
Jackson attributed the increase in cash balances to a more targeted rollback effort and a focus on reducing short-term borrowing. The budget office has been working with each department throughout the county to find ways to cut costs and keep expenses below revenues.
“Because we never budgeted for every expenditure—we weren’t just spending everything that came in—we’re in very good shape,” Jackson said.
The county’s retirement fund is also in good shape and is about 85 percent funded, Jackson said.
“We continue to strive to get that to 100 percent,” he said. “This is another balance sheet item we’ve been very proud of.”
Growth seen in rising expenses for law enforcement, administration of justice
Expenses in the general fund are projected to increase by 4 percent over last year. The proposed budget includes:
- $665 million for law enforcement
- $445 million for the administration of justice
- $161 million for infrastructure and systems administration
- $181 million for county, fiscal and purchasing services.
A majority of the growth in spending over the last few years can be attributed to law enforcement and administration of justice, according to a report from the county. The two categories make up 76 percent of all departmental spending in the preliminary budget.
“One thing that always astounds me is the amount we spend on law enforcement and justice,” Jackson said. “[The budget office] will have a division [in place] March 1 to take a look at the justice system. It’s become such a big item.”
Officials are concerned about legislative attempts to limit property tax collections
According to a county budget report, property taxes provide about 80 percent of general fund revenues for Harris County while also covering general debt service obligations, most of the budget for the Harris County Flood Control District and $700 million for the Harris County Hospital District.
Texas Senate Bill 2, considered a priority by Lt. Gov. Dan Patrick, would reduce the rollback rate to 4 percent, meaning that an election would be required any time a city or county wants to adopt a property tax rate that will result in a four percent increase in taxes collected.
As a result, cities and counties across the state have expressed concern about being able to pay for road and infrastructure projects, as well as increasing public safety costs. In Harris County, where growth has continued in unincorporated areas, property taxes are particularly crucial, Jackson said.
Harris County Judge Ed Emmett said Senate Bill 2 sets up a false premise by comparing an increase in the total property tax revenue brought in by a governmental entity to increases in property taxes at the individual level.
“It doesn’t take growth into consideration or that a decline [in market condition] comes faster that the recouping,” Emmett said.
Jackson also addressed a common misconception—that the county’s growing cash balance is evidence that people are being overtaxed. Maintaining a deeper cash balance is necessary for a county as large and complex as Harris County, he said.
