After a recent freak windstorm and hurricane left much of Houston powerless and facing $211 million in damage, residents may soon find themselves saddled with several more burdens: a 9.5 percent countywide property tax increase; a $4.4 billion school bond, the largest in Texas history; a flood control district tax hike; and, possibly, a City of Houston tax increase. Many residents, still recovering, are looking for a pressure relief valve.
Fiscal restraint and pragmatism, deriving from a business-centric attitude and middle-of-the-road politics, have largely allowed Houston to avoid the pitfalls of other major American cities. Now that dynamic is changing, due to single-party dominance, partisan politics, and rigid thinking.
Harris County, the City of Houston, and the Houston Independent School District each impose their own tax burdens on the region’s 7 million residents, but in doing so, they consider only their individual needs, not the aggregate cost to taxpayers. And lately, those needs have risen sharply.
In May, Houston was hit with the worst wind event the area has experienced in more than two decades. Winds as fast as 100 miles per hour left nearly a million customers of CenterPoint Energy, the region’s state-mandated utility provider, without power for 24 hours, and 60,000 homes, businesses, and schools powerless for up to a week. Six weeks later, Hurricane Beryl struck, this time leaving 2.26 million of the region’s 2.6 million CenterPoint customers powerless in Houston’s punishing July heat. As the heat index reached 105, more than 500,000 customers remained without power for a week.
Then came budget season. In previous years, Republicans in the county’s administrative body, though still a minority, used tactics like quorum-busting to block tax increases. Now with a supermajority, Harris County’s Democratic leadership has approved a 9.53 percent property tax increase, amounting to roughly $160 for an average homeowner. Meantime, the Harris County Flood Control District, a separate tax entity overseen by the county, is seeking a tax hike that will take an extra $60 from a typical homeowner. Voters must approve this flood-control tax increase in the November elections, however.
Voters will also decide whether to approve a $4.4 billion school bond for the Houston Independent School District. Following years in which student outcomes failed to improve, in 2023 the state took over the district, the nation’s eighth largest, replacing its elected board with an appointed board and superintendent. The state appointees have struggled to build a relationship with a wary public. Nevertheless, they have made the questionable decision to seek public approval for the largest bond in state history.
Houston mayor John Whitmire’s finance director proposed various tax-increase options to finance disaster recovery, an ongoing budget shortfall, a growing deficit as federal relief funds run dry, and a $1.5 billion landmark firefighter settlement. The minimum increase for the city to cover the costs of the disasters and avoid budget cuts is 3.2 cents, or roughly $166 for the average homeowner. Though the mayor now says that he won’t support a tax increase, which topped out at 6 cents, some city council members are still pursuing the new levy.
Houston (and Texas more broadly) has long maintained a reputation for affordability compared with other big cities in the U.S. But for how much longer? Consider: in the 2016–2017 school year, the Houston Independent School District’s enrollment reached 216,100, its highest ever, but by the first day of the 2024–2025 school year, enrollment was down to 173,000. Between 2010 and 2020, Harris County grew by 63,800 residents annually; over the past three years, the county’s growth has slowed to 35,000 per year, or 2 percent, while the neighboring counties of Montgomery and Fort Bend grew by 14.6 percent and 11.4 percent, respectively. The City of Houston’s latest financial report showed the city population peaking in 2020 at 2.315 million, and recent Census estimates put the current population at 2.314 million.
Houston has until October 28 to set a tax rate. There’s no better time for the city to explore permanent, sustainable cost-saving measures instead of increasing its reliance on taxpayers. For instance, Houston’s “civic art ordinance” requires that 1.75 percent of each capital project’s construction budget be spent on artwork—is that a justifiable requirement for a cash-strapped city? City employees earn up to eight days of sick leave, and their unused time not only accrues but also gets matched by the city. Departing city employees receive a payout for unused time; for some, this has amounted to hundreds of thousands of dollars, and these expenditures are costing the city somewhere between $15 million and $20 million annually. Officials should explore capping the amount of unused time that can be paid out, just as the private sector does.
This nine-county, 7.3 million-person Houston region is still growing at a rate that nationally puts it second only to the Dallas–Fort Worth area, but its expansion is largely occurring outside the core units that have long served as the economic drivers of the region and state. Local officials should avoid the tax-and-spend mistakes of other big U.S. cities that have become drags on their growth rather than engines of it.
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