(Texas Scorecard) – Houston Mayor John Whitmire is considering a tax increase to offset the costs of the city’s two recent disasters—the May derecho and Hurricane Beryl—as well as the $1.5 billion firefighter agreement, a budget deficit, and the end of federal relief aid.
This week, during a budget and fiscal affairs committee meeting, Houston Finance Director Melissa Dubowksi rolled out five different proposals for the city to generate additional revenue through a tax increase.
The city has traditionally lowered its rate because of a voter-imposed property tax cap implemented more than a decade ago. However, in recent years former Mayor Sylvester Turner has used an exception to state law that allows for a tax increase during a year that a disaster was declared. Whitmire is considering using the same provision.
“Our property tax rate ten years ago was .63 cents per $100 valuation, we are at .51 cents,” said Chair of Budget and Fiscal Affairs Sallie Alcorn. “We’re not picking up the trash, we don’t have a trash fee. Every other city, they all have higher tax rates and they have these extra fees.”
If the city maintains the current rate of .51 cents per $100 it would have to cut $86 million out of its recently passed 2025 budget. If they approve the second option, a 1.7-cent increase, they would have to cut $40 million in expenses. The third option, a 3.2-cent increase, would generate $40 million, the exact cost of the two disasters; while option four, a 4.5-cent increase, would generate $73 million, enough for the disaster and an additional $37 million for other expenses; and the final option, 6.2-cents, would generate $119 million, $79 million above the cost of the disaster.
The third option, which would generate just enough to allow for the costs of the disasters—the 3.2-cent increase—would mean a $166 property tax increase for the average homeowner.
The city has until October 28 to set a tax rate and while they have yet to have formal public hearings on the rates, according to the conversation it seems as if they will pursue an increase of an amount to be determined.
During this week’s regular city council meeting the conversation came up again.
Mayor Whitmire said he wanted to identify internal cuts before pursuing an increase, but that everything is on the table. “The political environment is very complex right now with the school board asking for the largest ever bond issue in the state, the county moving on draining maintenance funds, an increase in taxes, and now they’re going to take the same exception to the revenue cap,” he said. “I do still plan to get additional resources from other agencies.”
Whitmire has repeatedly said that he will look to the state for additional assistance.