InsideOut at City Hall

by Annise D. Parker

TAXES AND DRAINAGE

Tough tests face a divided council

Local elections, budget deficits and proposed tax cuts, drainage fees, and rail: Nowhere but Houston. These are the most stressful of times at City Hall.

Like many cities in this uncertain economy, Houston faces a budget shortfall of at least $10 million in the current budget. This year’s financial crisis had been brewing for a couple of months by early October when council was set to vote on two of the hottest issues in my council tenure: another tax cut and a drainage fee.

Whether you pay any attention to politics or not, every Houstonian is affected by the city budget deficit and the tax rate, 65.5 cents per $100 valuation. Do you care how fast the police or fire truck responds to your call? Does it matter if the nearest library is open when you need it or how long you have to wait for an appointment at a city clinic?

While many cities, including major Texas cities and counties, are raising taxes to help combat deficits, Houston teetered on the verge of cutting taxes and city services. Fortunately, council came to its senses and rejected the reckless rollback proposals.

Another one-cent cut would mean about $10 year for the homeowner, but would reduce city revenues by $10 million and lead to service cuts. Unless there’s a reversal in our flat sales-tax revenues (25 percent of the budget), service cuts could become reality in the near future. We’ve already cut library hours, and not reopened a health clinic closed for mold remediation. What’s next?

Most cities are facing budget deficits in the wake of declining sales taxes, shrinking pension funds, escalating health insurance costs, and ballooning police and fire contracts. With a $95 million deficit, Dallas laid off employees, rescinded a 10-percent raise, and hiked taxes three cents last year. With the state’s highest property values, Austin just approved a 7-percent property tax hike. San Antonio and Fort Worth just voted to retain their tax rates. Fort Worth already has the highest tax rate (86.5 cents per $100 valuation) of any major Texas city.

Isn’t there fat that could be cut in the Houston city budget? Sure. But we’ve been cutting back for three years. Already, about 200 people have been laid off. About 1,400 positions have been eliminated. Like any successful diet, losing fat instead of muscle takes time. All non-work-related travel has been eliminated. Take-home cars, printing, and publications have been trimmed dramatically.

By the time you read this article, the mayor probably will have proposed $10 million in cuts. Council will suggest other cuts. What will finally pass is anyone’s guess, but I will do everything I can to ensure that any cuts are in the best interest of the city.

Drainage fee

I voted for the drainage fee because I believe it is the most economical way for all of Houston’s overburdened taxpayers to pay for our massive drainage needs, estimated at more than $1 billion.

The city does not currently have the money to pay for it and cannot just add such a massive program to a future CIP bond issue without knowing it will be able to repay that debt. Until the 9–6 vote, Houston was the only major Texas city without a drainage fee.

I wish the city had not spent the $325 million in excess water and sewer funds on unrelated projects over the past decade. I have spoken out and voted against robbing the water and sewer fund and led the charge, along with council member Bruce Tatro, to end that practice. Unfortunately, that was the source of the minimal drainage work we’re doing. The drainage fee will cover that as well as debt financing of a massive list of projects in our drainage master plan.

My drainage fee vote was contingent on two actions: that the city develop more stringent prohibitions on development in the flood plains and that the city review all aspects of its development ordinance to prevent future construction from perpetuating current drainage problems;

I have repeatedly called for a set of new guidelines to change the way development is handled in the city so that we don’t create a new drainage program to fix some of the flooding problem while continuing to create more flooding with our inadequate development practices. Recommendations from the Greater Houston Partnership and the public works department are expected by the end of the year. These changes are needed:

• use of new floodplain maps;

• more detention and retention;

• more capacity in the storm-water infrastructure;

• more permeable surface;

• a plan for ongoing maintenance of the detention.

As much as council wanted a sunset clause in the fee, bond advisers told the city not to include such a specific clause. Instead, the drainage program will be reviewed annually. Council also voted to apply the fee to all property with no exceptions.

As you may know, the recent engineering study recommended the following drainage fees, all based on ERUs (equivalent runoff units). Most homeowners will pay $2 a month extra on their water bills beginning in February.

Small homes (<924 sq. ft.)…6 ERU…$1.20 mo.

Medium homes (925–2,209 sq. ft.)…1.0 ERU…$2.00 mo.

Large homes (>2,210 sq. ft.)…1.7 ERU…$3.40 mo.

Commercial/industrial…14.2 ERU/acre…$28.40 mo.

Institutional/religious…9.6 ERU/acre…$19.20 mo.

Transportation/utility…2.3 ERU/acre…$4.60 mo.

Governmental…8.1 ERU/acre…$16.20 mo.

Annise Parker, who is serving her third term in Houston City Council At-large Position 1, is a candidate for city controller. To receive her bi-monthly email newsletter, contact annise.parker@cityofhouston.net or call 713/247-2014. Her website is www.ci.houston.tx.us/city govt/council/1.

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