'We don't have the money': Economist weighs in on finances after mayor claims city is 'broke'

Chaz Miller Image
Wednesday, March 27, 2024
Economist weighs in Houston's finances
After Houston Mayor John Whitmire claimed the city was broke, council members and economists disagreed on whether there's enough money.

HOUSTON, Texas (KTRK) -- It made headlines when Houston Mayor John Whitmire claimed the city was broke, but two council members ABC13 spoke with Wednesday morning said things aren't quite that dire.

"I don't necessarily believe that the city is broke," District J Councilman Edward Pollard said.

Tiffany D. Thomas of District F also disagreed with Whitmire's assessment.

"I don't think the city is broke at all," Councilwoman Thomas said. "I challenge that position, and I think that's the wrong language that we need to send out."

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Thomas and Pollard said the city has enough money to avoid being classified as "broke."

Sales tax revenue projections were also given as reasons by both council members.

So, why is there such a divide between the City of Houston officials?

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"It's different perspectives, but they're not looking at the bigger picture," John Diamond, the Center for Public Finance director at Rice's Baker Institute, said. "There's a lot that needs to be funded. There are a lot of roads that need to be redone, there's a lot of city infrastructure that needs to be redone, and we don't have the money to do it. The only thing we can do at this point is borrow."

Borrowing via bonds was an agenda item at the city council Wednesday morning.

One approval will allow the city to ask for bonds on pretty much any topic. The other approval was for a bond to help fund the airport system.

It tops out at $1.95 billion and includes funding for the United Airlines Terminal B redevelopment project at Bush Airport.

Diamond likened the use of bonds to kicking a can down the road.

"You don't have the funds, so you're going to borrow that money," he explained.

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