The Houston City Council has approved Mayor John Whitmire’s $7 billion budget.
Council members proposed more than 60 amendments that reflected their constituents’ concerns, ranging from public safety and nuisance abatement to fiscal accountability and animal control. While the administration supported several amendments, others were rejected or withdrawn because they did not qualify as formal budget actions.
The budget passed 14-3, with council members Edward Pollard, Abbie Kamin and Tiffany Thomas voting against it.
“It’s always easy to find fault,” said Whitmire. “There is no such thing as a perfect budget. And it’s so easy to be against something than for something, particularly when you don’t have to offer up any solutions…We were told we couldn’t do it. We couldn’t balance it by political critics. We ignored it and went forward. This is a giant step. We’ve been very transparent since I got here about the level of our shortfall.”
Individuals from two community advocacy groups, Northeast Action Collective and Pure Justice, protested against the budget and were later escorted out by City Hall security personnel.
Fourteen amendments were approved, including:
- A transfer of $375,000 from the general fund to pay for legal staff addressing neighborhood nuisance actions and human trafficking
- Transfer $150,000 from the general fund ending for staff to enhance enforcement of short-term rental and other ordinance violations
- 1% of the excess fund balance to the budget stabilization fund (rainy-day fund) for disasters
- $25 million of drainage funds to local drainage projects
- $20 million of drainage funds to the ditch reestablishment program
- $1.3 million of revenue from IKE digital kiosks to bolster funding for mowing activities performed by the Houston Parks and Recreation Department
- Non-training related travel expenses to be capped at FY 2025 estimate levels, resulting in a savings of $217,643
- Transfer of 1% of the General Fund ending fund balance to be used in each of the 11 council districts to address localized drainage concerns
- Transfer $350,000 of the general fund ending fund balance to BARC for kennel cleaning contract services
What the controller said
City Controller Chris Hollins said the proposed budget is not structurally balanced despite being promoted as such. Although projected to end the fiscal year with a $354 million fund balance, with 13.7% of expenditures excluding debt service, Hollins emphasized the city’s heavy reliance on its reserves to close a projected $100 million shortfall.
He also criticized the use of the fund balance drawdowns as a budget-balancing tool and took issue with the rushed timeline for council review, noting that his office received the budget draft two weeks before presenting it publicly.
“That’s not nearly enough time for thoughtful views, collaboration, or public engagement,” Hollins said. “There’s no successful private company in the world that would hold the CFO out of the process for that long.”
The administration countered, defending the timeline and the structure. Finance Director Melissa Dubowski said the budget includes a 2% decrease in spending from the previous year and incorporates cost-saving reforms suggested by the Ernst & Young citywide efficiency study, also pointing to community engagement and budget workshops.
A point of contention was a potential property tax increase. While the budget assumes a 9% rise in property tax revenue, appraisal values are expected to grow by 2%, resulting in a 5% to 8% tax rate hike. A similar gap between revenue targets and actual rates led to a $50 million shortfall last year. Hollins warned that the city risks repeating a similar mistake without adjusting assumptions or taxes.
Meanwhile, another source of concern is House Bill 2688, a state legislation that revises the Deferred Retirement Option Plan (DROP) for Houston’s police and fire pensions. Hollins said the lack of transparency surrounding the bill concerns him, but it was supported by the mayor and had bipartisan backing in Austin. The Whitmire administration maintained that the bill is cost-neutral, but Hollins and a few council members demanded a third-party actuarial review.
With a five-year forecast projecting a $500 million budget deficit, council members like Edward Pollard feared that short-term decisions could trigger long-term financial peril.
What does the budget entail?
The budget’s general fund amounts to about $3 billion, comprising a $200 million deficit after the Whitmire administration reduced spending by $75 million.
This includes $16 million in department budget reductions, with funding cuts of $4 million to the Houston Parks and Recreation Department, $1.8 million from libraries and almost $2 million from health and $7 million from the Department of Neighborhoods. On the other hand, the City Council recently approved a five-year contract with the Houston Police Department, adding $67 million to its $1.1 billion portion of the general fund.
Additionally, the city’s 22 departments presented their budgets and were asked to consolidate, saving an estimated $19 million. The city stated that it saved $29 million from general fund employees taking a retirement incentive package. Nearly 3,000 employees have retired. Moreover, METRO is expected to save the city $22 million by paying for streetlights and traffic signal electricity.
Around $184 million was transferred from property tax revenue to street and drainage projects, $40 million more than last year. Also, police, fire and municipal employees will see a 10%, 3% and 3.5% pay increase, respectively.
Overall, the fund balance is projected to be $318.7 million, nearly $130 million above the 7.5% required by the city’s financial policies.
Outside the general fund, $490 million has been dedicated to street and drainage funding overall, $99 million in total savings from employees retiring early, $460 million in pension costs for police, fire and municipal employees and $442 million in employee and retiree health cost benefits.
Councilmember Tarsha Jackson’s proposal to allocate $25 million to the Local Drainage Program, prioritizing the most critical areas, passed unanimously. She called it a “contingency measure against disasters—it’s an issue of social equity and justice.”
Recently, the Whitmire administration announced a deal with plaintiffs in a lawsuit over the city’s drainage budget, which reduced its budget deficit from $330 million to about $220 million. The city is now trying to address its compliance with contributions to the Dedicated Drainage & Street Renewal Fund (DDSRF).
Public trust and transparency also emerged as central themes. Council member Letitia Plummer proposed adding a full-time sworn officer within the Houston Police Department to serve as a liaison to the African American Police Officers League (AAPOL). She said the role would help strengthen community ties and expand access in underserved neighborhoods. The administration opposed the amendment, arguing it would require consultation with the department leadership.
Protests
Members of Northeast Action Collective (NAC) held up posters that read “Your budget is a scam” and “Houston says no!”
NAC said it has been fighting over the past seven years to invest more dollars into improving its drainage infrastructure.
“With this budget, the mayor went against a Texas Supreme Court judge’s ruling of stopping a twice-voter-approved drainage tax transfer,” said Anil Kapoor, a NAC advocate. “The Texas Supreme Court judge said that diversion needs to stop, but the mayor went behind the settlement and essentially created a separate settlement with the plaintiffs that’s now then been approved by the judge to continue the diversion, which we are incredibly upset about. That means there’s less flood protection for vulnerable communities like ours.”
RoShawn Evans, co-founder and organizing director of Pure Justice, said the criminal justice advocacy group is rallying against the city spending “too much money” on public safety. Instead, Evans said, the city should redirect its funds toward uplifting incarcerated individuals.
“Where I come from, people are forced to live in survival mode and they shouldn’t have to be forced to live in a survival mode,” he said. “People shouldn’t be having to figure out how to come up with a couple of extra hundred dollars to pay for my apartment or send my kids to school with lunch or lunch money…Every time we expand the system that preys on our communities, we create a deeper hole of generational poverty and trauma.”
During the budget meeting, the group held up green and red sheets of paper, indicating their likelihood of favoring certain amendments. Police officials stepped in to clear the council chambers when the disruptions became heated.
