Mayor Sylvester Turner pushes back after new budget report cites issues within Houston

HOUSTON, Texas (KTRK) -- There's a financial storm that has been brewing for some time in the city of Houston and now the author of a new report analyzing Houston's budget says we are at a tipping point.

The Greater Houston Partnership's budget task force commissioned the report to examine the city's fiscal issues, and the mayor's office told ABC13 it's factually wrong.

According to the report's author, something needs to be done about the city's spending soon.

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"We've been running a structural budget deficit for the last decade. The deficit's been getting worse," John Diamond, a professor at Rice University and the report's author, said.

The report finds Houston spends $100 to $200 million more yearly than it brings in. It states the city has plugged holes by selling properties and using federal COVID-19 dollars to compensate for the shortfall.

The city controller said both can't continue, and fees and taxes need to be raised, which are limited by the revenue cap on property taxes or managed expenditures.

"The challenge, I think, is to do it in phases. Rather than cut everything in 2026, we cut a third, a third, a third. There are several ways to do that with eliminating vacate position or suggestions through our PFM report," controller Chris Brown said.

But Mayor Sylvester Turner said there are some significant factual errors.

Turner said the report focuses on the sale tax projections of an economist who recently revised his report, and the Greater Houston Project did not reflect those revisions.

The mayor said his pension reformers talked about it as a political move when he says, in fact, it was a financial victory. And third, he said the report implies the unrestricted fund wipes away the net position.

"The only thing they had to do was, the Greater Houston Partnership and their people, was come and talk to the mayor or come and talk to the finance director. How can you write an assessment on the city of Houston and you don't talk to the chief executive officer of the city of Houston?" Turner said.

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The author said he stood by his report when asked about the mayor's critiques. The controller's office said any changes may impact the tone, but the report's results would be the same.

The Greater Houston Project sent out a statement that read in part:

"The Partnership has committed to work with the City's finance office to correct any factual errors in our whitepaper. But nothing we have heard to date would suggest that the fundamental conclusion will change: the City faces a structural budget imbalance that must be addressed by the next administration."

The mayor told ABC13 he's proud of the budget he's handing off to the next administration.

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