City now 'broke' after ex-mayor claims surplus of $420 million
[Editor's note: This story originally was published by Real Clear Wire.]
By Adam Andrzejewski
Real Clear Wire
Topline: Former Houston Mayor Sylvester Turner claimed his city had a $420 million surplus before leaving office in December.
That’s not the case. In reality, the city is completely “broke” with a deficit of $160 million, according to Mayor John Whitmire.
Key facts: The Greater Houston Partnership called Turner’s dollar figure a “budgetary sleight of hand” because it did not include many of the huge liabilities on the city’s books.
Turner ignored $3 billion in deferred maintenance on roads, $3 billion in upcoming costs for water infrastructure and more, according to the Partnership.
The city has avoided problems thus far by using $1 billion in federal COVID relief funds, but those will soon run dry.
The think tank Truth in Accounting gave Houston a letter grade of “D” in its annual “State of the Cities” report and estimated that it would take $9,000 from each taxpayer to pay off the city’s debt.
City Controller Chris Hollins said the city will likely ask voters to fund a bond in November to cover the deficit.
Whitmire proposed a 5% budget cut to all city agencies except the police and fire department.
Houston is already struggling to pay its current expenses. The city recently agreed to give its firefighters $650 million in backpay because they’ve been working without a contract for seven years and made less than their peers in other large Texas cities.
To pay for it, Houston is selling taxpayers a bond that won’t be paid off for 25 to 30 years and will be worth over $1 billion with interest.
Background: Houston’s situation might improve if it could cut down its $1.6 billion payroll.
For example, Houston paid out salaries of nearly $400,000 each to 12 different doctors last year, according to OpenTheBooks.com.
Mayor Turner made $236,000 — a hefty salary, and one of the largest in the country – even for a big city mayor.
Critical quote: Chuck Mahron, founder of the urban planning group Strong Towns, said Houston’s financial issues run too deep to be solved by simply raising taxes.
“Houston is the North American growth pattern on steroids, right; it is kind of the poster child of horizontal expansion – Houston has just outgrown itself,” Marohn told Texas Standard.
“It has built more roads, more pipes, more sidewalks, more infrastructure, more drainage areas, more parks than its tax base has the capacity to sustain … The things that Houston has done to generate growth and prosperity has actually made it insolvent. And that is the core problem they’re dealing with.”
Summary: It’s bad enough that major cities in America are millions of dollars in debt. It’s even worse when officials hide that fact from taxpayers.
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