On Tuesday, former State Senator John Whitmire was sworn-in as the Bayou City’s next mayor and he made it clear that public safety will be front-and-center. He said: “My number one priority and the priority of Houstonians is public safety. If we do not address public safety, the other quality of life issues will not matter.”
The focus on public safety is commendable and corresponds well with recent polls showing: “there is a general consensus among Houston voters that crime should be a top priority for Houston’s next mayor….” Even still, Mayor Whitmire should not neglect fiscal matters since without a sound budgetary footing, city officials won’t be able to adequately fund new and existing public safety priorities. In other words, sound public finance enables city officials to pursue everything else.
With that in mind, here are five things that should be on the mayor’s fiscal to-do list.
- Prepare for the Worst. Last year, outgoing city controller Chris Brown warned of $300 million budget deficit looming in 2025, resulting in large part from Houston’s misuse of $1 billion in federal pandemic aid. He said: “Instead of using that funding to narrow our structural budget imbalance…we used this one-time money to fund recurring expenditures.” Needless to say, using one-time money to fund ongoing expenses is a recipe for disaster—and soon that disaster will fully unfold.
Mayor Whitmire can prepare for the difficulties ahead by instituting a temporary hiring freeze, suspending pay raises for employees earning above a certain threshold, replacing longevity pay a merit-based approach, and eliminating unnecessary positions, like taxpayer-funded lobbyists (the city’s latest adopted budget speaks to this cost, saying: “The FY2024 Budget includes an estimated cost of $400,000, a decrease of $500,000 from FY2023 Estimate of $900,000 due to the ending of the 88th legislative session”). These “payroll-related adjustments” will help prepare the way for any effort to close the budget deficit.
- Plan for the Future. Oftentimes, public sector positions and programs become permanently embedded within the structure of government. To quote Ronald Reagan: “Government programs, once launched, never disappear. Actually, a government bureau is the nearest thing to eternal life we’ll ever see on this earth!” Such an endless nature makes government more bureaucratic, impenetrable, and inefficient.
Mayor Whitmire can guard against such tendencies by subjecting the city of Houston’s budget and operations to a third-party efficiency audit. The audit’s goal is to determine where a governmental entity might be streamlined and perform better, and provide officials with a roadmap to work toward over the long-term.
- Put the Taxpayer Credit Card Down. In November, the Foundation released a new paper on government debt titled: Just the Facts: Government Debt in Texas’ Most Populous Cities, Counties, and School Districts. In it, researchers determined that the city of Houston had borrowed a total of $19.5 billion in FY 2022, which amounts to roughly $8,500 owed for every resident. In aggregate, Houston’s debt was the largest of any big city. On a per capita basis, Houston’s debt was the third largest by comparison. Such exaggerated borrowing has obvious fiscal consequences, i.e. tax increases, which negatively impact family budgets.
Mayor Whitmire can help ease the city’s debt burden by slowing spending, deferring unnecessary projects, and finding creative (taxpayer-friendly) solutions to the city’s infrastructure needs.
- Prune Big Government. Much to the delight of Texas conservatives, the Legislature last year passed the best preemption measure in the nation (see HB 2127), in an effort to stop the progressive agenda from taking root at the local level and force cities/counties to get back-to-the-basics. While the law is currently tied up in court (progressives are terrified that it will upend countless collectivist schemes), it’s hoped that the law will be able to take full effect in the relative near future.
Mayor Whitmire can prepare for the law’s likely implementation by identifying all of the affected programs and personnel—and then make plans to hastily reduce or eliminate those parts of city government. A reorganization of this nature could well produce mighty savings for use in other areas of the budget or even be returned to taxpayers in the form of lower tax rates.
- Pare Property Taxes. The number of people calling Houston home isn’t growing much. Consider that from 2014 to 2023, the city’s population increased from 2,196,367 to 2,302,878, or 4.8%. But while its population growth has been meager, the city’s tax collections have been more robust. From 2015 to 2024, the city’s property taxes rose from $1,179,876,000 to $1,611,816,000, or 36.6% (source: Annual Comprehensive Financial Report for 2023). A mismatch of this type—between population growth vs. property tax levy growth—suggests that there are opportunities to make reasonable adjustments to the city’s tax intake, which could well help attract new residents and businesses to contribute to the economy and its tax base.
Mayor Whitmire can lower the city’s tax burden by working toward adopting the no-new-revenue tax rate in the upcoming fiscal year. This is tantamount to calling a taxpayer time-out and signals that the city is serious about change—which, again, could help attract new people, money, and interest and set the city up for future success.
By checking off these five fiscal to-dos, Houston’s new mayor can set the city up for tremendous success and enable the city to more fully realize all of its other priorities, like fighting crime and cleaning up the streets.