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

Houston, Texas is facing dire financial challenges, as highlighted by Mayor John Whitmire’s recent statement during a city council meeting: “Houston is broke.”

City Controller Chris Hollins echoed this sentiment, noting that Houston is spending between $150 million and $200 million more annually than it’s generating in revenue.

To address the shortfall, Houstonians will inevitably face increased financial burdens. For instance, the proposed firefighter settlement is estimated to cost $650 million over the next 25 to 30 years, pending council approval.

Furthermore, discussions are underway regarding potential utility bonds and a nearly $2 billion bond for airport system improvements.

Hollins suggested several measures to alleviate the financial strain, including potential bond propositions for voter approval, the implementation of a trash fee (a measure absent in other major Texas cities), and seeking an exception to the revenue cap to ensure firefighters’ salaries can be paid.

The current financial predicament has been brewing for decades, exacerbated by factors such as the COVID-19 pandemic and long-standing pension fund issues, according to John Diamond, Director of the Center for Public Finance at Rice University’s Baker Institute.

Diamond warned that taxpayers should brace for significant rate and fee hikes over the next five to 10 years as the city grapples with its fiscal challenges. He emphasized the urgency of the situation, characterizing it as a crisis requiring immediate action.