Houstonians should expect major rate, fee hikes, expert says: 'We're in a little bit of a crisis'

Pooja Lodhia Image
Tuesday, March 26, 2024
Houstonians will likely see increased costs for city services
Houston voters could have to choose to accept paying for new fees to meet the costs of a new contract for firefighters.

HOUSTON, Texas (KTRK) -- You heard it straight from Mayor John Whitmire at last week's city council meeting: "Houston is broke."

"On an annual basis, we are spending somewhere between $150 million and $200 million more than is coming in," City Controller Chris Hollins said.

One way or another, you'll have to pay for it.

SEE MORE: New financial report says City of Houston is at tipping point

The upcoming firefighter settlement will cost Houstonians $650 million over the next 25 to 30 years if the mayor gets the council approval he's asking for.

This week, council members will discuss two more possible bonds, one for utilities and another totaling nearly $2 billion for the airport system.

"That's very likely what we're looking at, going to the voters this November and saying, 'Here's the plan, here's what it's going to cost, and we're asking you to chip in.' Potentially a trash fee. We're the only major city in the state of Texas that doesn't have a trash fee. It may be coming to the voters and asking for an exception to the revenue cap so we can pay our firefighters," Hollins said.

FROM 2023: Houston could be forced to make big cuts if spending vs. revenue problem unsolved

It's a gloomy outlook Houstonians haven't heard in years.

So, how did we get here?

"(The COVID-19 pandemic) really silenced the conversation because we got so much money from the federal government that we were able to make our budgets work, but really, this problem started 20 years ago, almost a quarter century ago, with the pension funds," John Diamond, the director of the Center for Public Finance at Rice University's Baker Institute, explained.

Diamond said taxpayers should expect substantial rate and fee increases for at least five to 10 years from now.

"We're beyond the, 'Can we afford it? Is this a good decision?' This is a, 'We're in a little bit of a crisis, and we have to do this to try to see if we can rebound,'" Diamond put it.

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SEE ALSO: City's deal with HFD on raises sparks passionate debate about the billion-dollar price tag