Houston Metropolis Council retains property tax charge unchanged

The Houston Metropolis Council opted to not increase the town’s property tax charge on Wednesday regardless of considerations the transfer would result in a $53 million funds shortfall that may additional deplete the town’s monetary reserves. 

The 11-3 vote retains the mixed upkeep and operations and curiosity and sinking fund tax charge at $0.519190 per $100 of taxable worth, the identical as within the earlier tax 12 months.

“The general public is asking us to not increase taxes,” mentioned Mayor John Whitmire, who pushed for an unchanged tax charge as his administration works to make metropolis authorities extra environment friendly.

Final week, Houston Controller Chris Hollins raised considerations in regards to the tax charge’s affect on the $7 billion all-funds funds the council authorized for fiscal 2026, which started July 1.

“We’re speaking a couple of self-inflicted shortfall of $53 million and that is on high of the 70-plus million {dollars} in deficit spending that you simply already authorized explicitly together with your funds votes,” he mentioned. “To cowl that hole, we’ll have to attract down our reserves even additional, the identical reserves that we rely on throughout hurricanes, freezes, and financial shocks.”  

Houston Metropolis Council Finances and Fiscal Affairs Committee Chair Sallie Alcorn, who voted in opposition to conserving the tax charge flat, mentioned there’s room beneath state and city-imposed property tax income caps to boost the speed and that even with taxing as much as the caps, projections point out baseline funds gaps of $227 million in fiscal 2027 and $463 million in fiscal 2030.

“What I do know with certainty is that dipping additional into our fund stability by $53 million weakens the town’s monetary place and balloons future deficits,” she mentioned.

Spending pressures and shrinking funds reserves led to detrimental outlooks final 12 months on Houston’s AA bond rankings from Fitch Rankings and S&P International Rankings. Each warned their rankings may very well be downgraded because of the continued depletion of reserves. Town has a steady outlook on its Aa3 ranking from Moody’s Rankings.

The fund stability for the nation’s fourth-largest metropolis, which hit a document $567 million on the finish of fiscal 2024, may finish fiscal 2026 at $321 million whether it is used to cowl the $53 million shortfall, based on metropolis officers.