Houston faces budget shortfall likely worse than Great Recession

Friday, February 5, 2021
Houston's budget shortfall likely worse than Great Recession
We're learning the city is seeing a major budget shortfall, but what exactly does that mean?

HOUSTON, Texas (KTRK) -- The city of Houston is looking at a budget shortfall upwards of $200 million, meaning layoffs and cuts to city services are likely.

Chris Brown, the city's controller, said the strain on the city's finances is looking worse than that of the Great Recession. His office is projecting a $200 million shortfall for the fiscal year 2022, which starts in July. This means layoffs are likely for city employees along with other cuts. He said the city has many unfilled positions and that may protect it from more job cuts that it would otherwise see.

"You are looking at public works [cuts]. You are looking at libraries, parks, solid waste," Brown said.

There's a combination of factors to blame, many of them pandemic-related but not all, Brown said. He pointed to the city's historical practice of having imbalanced budgets every year as putting it in a larger disadvantage.

"I'd hoped that we had done a little more to prepare for this," Brown said.

There was another example this week of a now-familiar factor leading to the shortfall: tax revenues are down due to pandemic closures and cancellations. The Houston Livestock Show and Rodeo cancellation alone will likely cost the city around $10 million in sales tax revenue, Brown said.

SEE ALSO: RodeoHouston's May start in 2021 canceled altogether

"People talk about the Super Bowl, but in fact, the rodeo's like multiples of Super Bowls. [The timing is] unfortunate the timing," he said.

Property tax losses are also to blame. Sales tax figures are more readily available, and there's a delay in seeing just how badly the property losses will affect the city.

The mayor and city council will now have to figure out where the cuts will come from, but it's safe to say the city's belt is about to get even tighter.

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