The Houston City Council opted not to raise the city's property tax rate on Wednesday despite concerns the move would lead to a $53 million budget shortfall that will further deplete the city's financial reserves.
The 11-3 vote keeps the combined maintenance and operations and interest and sinking fund tax rate at $0.519190 per $100 of taxable value, the same as in the previous tax year.
"The public is asking us not to raise taxes," said Mayor John Whitmire, who pushed for an unchanged tax rate as his administration works to make city government
Last week, Houston Controller Chris Hollins raised concerns about the tax rate's impact on the $7 billion all-funds budget the council approved
"We're talking about a self-inflicted shortfall of $53 million and that's on top of the 70-plus million dollars in deficit spending that you already approved explicitly with your budget votes," he said. "To cover that gap, we'll have to draw down our reserves even further, the same reserves that we depend on during hurricanes, freezes, and economic shocks."
Houston City Council Budget and Fiscal Affairs Committee Chair Sallie Alcorn, who voted against keeping the tax rate flat, said there is room under state and city-imposed property tax revenue caps to raise the rate and that even with taxing up to the caps, projections indicate baseline budget gaps of $227 million in fiscal 2027 and $463 million in fiscal 2030.
"What I know with certainty is that dipping further into our fund balance by $53 million weakens the city's financial position and balloons future deficits," she said.
Spending pressures and shrinking budget reserves led to
The fund balance for the nation's fourth-largest city, which hit a record $567 million at the end of fiscal 2024, could end fiscal 2026 at $321 million if it is used to cover the $53 million shortfall, according to city officials.
