Houston Mayor Bill White has proposed a $4 billion budget for fiscal 2010 that keeps the property tax rate at the current level and raises the operational budget by 0.5%.

“These are times when hard choices need to be made and we’re not punting any of those choices,” White said during a news conference following his presentation to the City Council last week. “I want people to know this global economic crisis will not be solved in a day. We’re going to have to plan ahead instead of reacting to things.”

The mayor’s plan calls for the city’s financial reserve to drop from the current $220 million to almost $170 million. He said additional reductions could jeopardize the city’s bond ratings.

Houston carries underlying ratings on its general obligation debt of AA from Standard & Poor’s, AA-minus from Fitch Ratings, and Aa3 from Moody’s Investors Service.

 White’s two-volume budget proposal said many vacant positions will remain unfilled. Houston has some 20,000 employees. He also said the city will attempt to renegotiate agreements with many of its suppliers and contractors.

City Controller Annise Parker said the budget anticipates $10 million in as-yet undetermined savings and that a chemical company that has filed for bankruptcy will pay the $15 million it owes in property taxes.

Expenditures include $1.14 billion for public safety, $220 million in debt service, and $92.8 million in administrative costs. Anticipated revenues include $909.7 million in property taxes and $507 million in sales taxes.

Houston’s fiscal year begins July 1.

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