Harris County officials are gearing up for another summer of tough budget decisions as the projected shortfall for fiscal year 2026-27 could reach up to $257 million, according to a May 14 presentation to Commissioners Court.
The preliminary projections from the Office of Management and Budget aim to guide priorities over the next several months as commissioners workshop the budget ahead of final adoption in mid-September. Details are subject to change as county officials receive more information.
The overview
Based on current spending forecasts, Harris County’s general fund shortfall for FY 2026-27 is projected to range from $129 million to $257 million pending the adopted property tax rate, OMB Director Daniel Ramos told Commissioners Court.
A current level of service and spending forecast, or CLS, shows Harris County is expected to spend approximately $3.06 billion in the next fiscal year. According to the presentation from OMB, expenditures include:
- $73 million for law enforcement, including $42 million for Year 2 of the county’s pay parity program—which increased officers’ salaries—and $31 million for position vacancies
- $69 million to restore countywide obligations funded by one-time sources, including a $25 million hiring freeze and $44 million in special revenue funds
- $38 million in projected health care increases
- $35 million in department spending requests, such as American Rescue Plan Act priority programs
- $32 million in tax-increment reinvestment zone increases, state-mandated requirements and general administrative cost increases
- $30 million in annualization of pay equity increases
- $20 million in inflation cost drivers such as fuel, critical software and vehicle maintenance
- $6 million in mid-year supplementals
While Harris County’s spending has increased year over year—jumping 12% in FY 2025-26 compared to the prior year—revenue sources aren’t keeping pace, the presentation shows. The county is on track to conclude the current fiscal year with a $27 million shortfall, Ramos said.
About 80% of the county’s revenue comes from taxes, according to data from the county auditor’s office. As of March 31, Harris County has generated approximately 88% of its estimated tax revenue—budgeted at approximately $2.7 billion—for FY 2025-26.
As for non-tax revenue, such as charges for services, fines and interest, actual revenues through the second quarter total approximately 45% of estimated revenue for the current fiscal year.
A quick note
In addition to increased demand for county services due to population growth, federal and state grant funding is dwindling as relief for COVID-19 and Hurricane Harvey approaches its end, the presentation shows.
The discussion
County Judge Lina Hidalgo said cuts are unavoidable, but she encouraged the county to evaluate efficiencies before jumping straight to cutting services.
She said the projected FY 2026-27 shortfall “didn’t happen overnight,” citing large pay raises for law enforcement that the county “could not afford.” Hidalgo voted against the FY 2025-26 budget alongside Precinct 1 Commissioner Rodney Ellis last September, Community Impact previously reported.
“You’re going to be hearing about Harris County fees, cuts [and] others soon enough if we don’t figure out a way to be more efficient,” Hidalgo said. “We put the county and the people of Harris County at a $200 million hole irresponsibly last year.”
Precinct 3 Commissioner Tom Ramsey said while he doesn’t want more statutory regulations to come out of the state Capitol, he’d like to see more support for Harris County at the state level.
“We are the economic engine for Texas,” he said. “When people gather in Austin, and they talk about the problem that is Harris County, talk to me about the Port, talk to me about the Medical Center, talk to me about all the other things.”
What’s next?
Harris County is in the middle of a months-long budget process, Ramos said. The new fiscal year begins Oct. 1.
- Mid-June: OMB gives another CLS update to Commissioners Court
- July 13-16: departmental budget hearings
- June-August: budget town halls hosted by commissioner precincts
- Aug. 17: OMB shares proposed FY 2026-27 budget and tax rates
- Sept. 8: budget amendment process
- Sept. 17: budget adoption and tax rate approval
