Houston could raise property taxes to address budget shortfall

HOUSTON, Texas (KTRK) -- The City of Houston may soon raise property taxes.

"We all know we have a shortfall. The city has essentially been funded by one-time federal funding during the last two financial budget cycles," Houston Mayor John Whitmire said.

In session Wednesday, council members attributed the shortfall to several factors, including recent natural disasters and the city's settlement with the firefighters union, which is something Whitmire, who negotiated the settlement, pushed back on.

Whitmire called the notion that the approximately $1.5 billion deal is driving the deficit "misinformation" and added that "we shouldn't try to drag down the firefighters."

According to City Finance Director Melissa Dubowski, on its current fiscal path, the city will be forced to make $83 million in cuts to staffing and services.

In 2015, the city hit its revenue cap, and property taxes have steadily dropped from 63 cents to approximately 52 cents per $100 valuation today.

Dubowski said that in the wake of the May derecho and Hurricane Beryl, the city could utilize a disaster exception that would allow it to surpass the cap and raise property taxes.

"I understand this hurts, but I will say it again and again, 'We can't have it both ways,'" Dubowski said.

"If we want more police, if we want more ambulances, if we want more firefighters on the ambulances, if we want better streets and drainage, it costs money. It all costs money," At-Large Position 5 Council Member Sally Alcorn said.

Alcorn broke down potential property tax raises with Dubowski. They said 3.2 cents would cover disaster-related expenses. A 4.5-cent raise will cover the disaster and raise $33 million. A 6.2-cent raise will cover the disaster and raise $79 million.

Dubowski said raising the tax rate from approximately 52 to 56 cents would cost the average family $144 annually.

"Though the public has had the benefit of that lower tax rate, the impact on services has been quite devastating," District K Mayor Pro Tem Martha Castex-Tatum said.

The city is required to set a property tax rate by the end of October.

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