Houston Mayor John Whitmire unveiled the city’s proposed Fiscal Year (FY) 2027 budget, a $7.5 billion spending plan, an increase of $384 million (5.4%) from the current budget. For the third budget cycle in a row under Whitmire’s administration, the city will not see a property tax increase, staying at 51 cents.
Whitmire called it a “transformative financial plan” covering the period from July 1, 2026, to June 30, 2027. He also introduced structural reforms to address a $174 million budget deficit this year, per city controller Chris Hollins’ forecast, and more than $200 million in FY 2027.
Two key reforms: Solid waste fee and right-of-way rental
Mayor Whitmire is announcing details of his proposed FY 2027 budget.
— Houston Mayor's Office (@houmayor) May 5, 2026
For more information, visit: https://t.co/TTBv82g8bH pic.twitter.com/1qos8qDyus
The budget includes two new revenue mechanisms, which the Whitmire administration says would generate roughly $220 million in combined relief.
The first change is a new $5 monthly administrative fee for residents, following a transition of solid waste services into the Houston Public Works Combined Utility System.
The administration says the fee, which it stresses is not a tax, will be held flat for at least two years and will generate $116 million in General Fund relief.
Whitmire said this will align Houston with other major cities that already fund garbage collection this way.
Council Member Willie Davis, representing At-Large Position 2, expressed support for the measure.
“We all have trash, and it affects all of us,” he told the Defender. “It’s an administrative fee, which is going to provide resources where we really need them. There is a lot of illegal dumping in the minority community, but we’re going to deal with that.”
The second reform is a right-of-way rental fee of 5% of on utility gross revenues, expected to generate $104 million annually. The administration notes that this is standard practice across major Texas cities, which typically charge between 4% and 14%.
Steven David, Deputy Chief of Staff for Whitmire, said this is not a new fee that will be charged to taxpayers. Instead, the plan would be based on the water and sewer system’s gross revenue.
The big picture
Credit: City of Houston documents
The General Fund alone totals $3.16 billion, a slight decrease of $11.1 million from last year, largely due to the transition of Solid Waste operations out of the General Fund.
“At the start of this budget process, Houston faced a projected $209 million gap. Through disciplined cost control and structural reforms, that gap has been reduced to $25 million,” city documents state.
Per those reports, the FY27 budget ends with a fund balance of $273.8 million, or 10.5% of expenditures, well above the city’s 7.5% policy minimum.
“For years, Houston operated under constraints that put us at a disadvantage—without dedicated funding for solid waste, without standard right-of-way charges, and under dual revenue caps,” Whitmire wrote in his budget message. “This budget begins correcting that imbalance.”
During previous budget cycles, Whitmire pledged that the city would not raise taxes until “waste, fraud, and abuse” were addressed, following an Ernst & Young efficiency study. Based on the study’s recommendations, the city identified savings, imposed a hiring freeze, restructured departments, launched a voluntary retirement program, and consolidated services.
Simultaneously, the Whitmire administration also approved raises for the police and fire departments.
Public safety dominates spending, other buckets follow
As in years past, public safety commands the lion’s share (~59%) of General Fund spending, totaling $1.86 billion:
- Police Department: $1.218 billion (a $105 million increase)
- Fire Department: $719 million (a $60 million increase)
- Municipal Courts and Houston Emergency Center: $36 million
The budget funds five police cadet classes and 11 fire cadet classes, Whitmire announced.
“The overtime in this budget reflects the demands on the department,” he said. “We’re in different times than we were just a few short years ago. Pop-up protests are very frequent. We must have overtime for our fire and police. The police and fire morale has never been higher.”
Infrastructure, by contrast, receives $49 million from the General Fund, or 1.5% of total expenditures.
Other allocations include $1.15 billion for “government that works,” and $97 million for quality of life.
Revenue streams
The city budget has considered these revenues for FY27:
- Property taxes: $1.5 billion (48% of General Fund revenue)
- Sales tax: $942 million
- Franchise fees: $148 million
- Other revenues: $539 million
Community raises concerns
Becky Selle and Alice Liu of the Houston Peoples Budget, a community-led campaign launched in April 2026 to push for a city budget that prioritizes essential services like infrastructure and flood protection.
“The only difference between the solid waste fee as it’s currently proposed and something like generating revenue for solid waste through raising property taxes is that with property taxes, rich households pay more,” Liu said. “With something like a solid waste fee that’s going to disproportionately impact low-income households.”
On infrastructure, Selle argued that the 1.5% General Fund allocation exposes a fundamental priority problem.
“You have 60% going into public safety and 1.5% to infrastructure,” she said. “It very clearly shows that it’s not a priority.”
Both advocates also raised concerns about the mayor’s use of restricted utility funds to patch the general deficit.
“We’re also concerned that the mayor is continuing his pattern of using restricted funding for drainage infrastructure and water infrastructure to plug holes in the deficit,” Liu added.
Long-term pressures
Houston’s workforce totals 12,586 General Fund full-time equivalents, with the Police Department accounting for exactly half at 6,293 positions, and Fire adding another 4,147.
Per city documents, credit agencies have flagged three structural risks for the city: Pension liabilities, other postemployment benefits (OPEBs), and the revenue cap (which limits the property taxes Houston can collect each year).
Houston’s pension liability currently stands at $1.7 billion. The administration says this budget maintains “responsible contributions to ensure long-term sustainability and protect retirement security.”
