What do to about Houston's budget shortfall

August 31, 2009 3:35:58 PM PDT
The city of Houston is operating $103 million in the red. That's according to the city controller, who met with city leaders Monday about how to avoid a financial mess like we've seen in many other cities during the recession. We're only two months into the budget year and signs of a financial crisis is brewing at city hall. Houston City Council has already anticipated dipping into its reserve funds to balance the budget for the current fiscal year and now, it appears the budget deficit could be millions of dollars larger than anyone's anticipated, leading many to wonder how the city will bridge the gap.

Having just bought a new house a month ago, the last thing Chris Rebman wants to hear is that the city is $103 million in the hole.

"You expect it to be better balanced than that," he said.

City Controller Annise Parker, though, says that's exactly the deficit currently facing the city. But she says council members and Mayor Bill White have known about the problem and as a first step, every city department was asked to cut one percent with other adjustments anticipated.

"This is a $2 billion operating fund," said Parker. "However, there are opportunities since we're early in the fiscal year to make the changes necessary."

Because of the economy, some property values have decreased, reducing the amount of revenues to the city of Houston, leaving some to wonder if services, like picking up the trash, will be affected.

"Something's got to give," said Rebman. "Either they've got to raise taxes or make up for the money somehow."

City officials have maintained all along that any belt-tightening will not affect city services, meaning no cuts in fire or police on the streets. As for other cuts, Mayor White says the situation is not as dire, arguing the real budget deficit is only about half of what Parker is suggesting.

"There's a budget gap that we're working on every day of about $25 million," said Mayor White. "And we expect to close that budget gap this year and leave the city with cash balances double what it was before the administration came in."

Mayor White says the city is working on a number of belt tightening ideas, including selling surplus real estate currently owned by the city.

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