Houston's proposed fiscal 2026 budget could lead to a bond rating downgrade due its reliance on one-time measures, deferred obligations, and questionable assumptions, according to Controller Chris Hollins.
The city's elected financial watchdog released what he called "
"Every household knows what happens when you build a budget on shaky numbers," Hollins said in a statement. "The city budget should be no different. This document outlines ten facts that must be considered and evaluated before the vote is made."
Spending pressures and shrinking budget reserves led to
The nation's fourth-largest city has a stable outlook on its Aa3 rating from Moody's Ratings.
Hollins' "hard truths" cited deficit spending in Mayor John Whitmire's proposed budget, which would tap more than $100 million from the general fund balance. That balance is projected to fall from an estimated $380.8 million on June 30 to $273.4 million at the end of fiscal 2026, according to
The controller also pointed to reduced funding for employee pensions and retiree health care and questioned budget assumptions for higher property tax revenue and cost saving measures.
Earlier this month, Whitmire called the budget, which includes a $3.033 billion general fund,
Hollins and Whitmire have been at odds over $100 million in property tax revenue the city must allocate annually for drainage and roads as a result of litigation. While the mayor in April announced an agreement with the plaintiffs to
City Attorney Arturo Michel told the council on Wednesday the court should take up the agreement "relatively soon" and that the controller's role does not include certifying Houston's budget.
The budget incorporates an $832 million, five-year contract with the Houston Police Officers' Union the council approved last week, as well as last year's firefighters' contract deal, which included the sale of $612 million
