Suburbs Sales Tax Collections Outpace City of Houston

For the last several years, I have been occasionally comparing the growth in the City of Houston’s sales taxes to some of its suburban neighbors.  Recently I compiled the sales tax records for seven Houston suburbs (Katy, Woodlands, Baytown, Pasadena, League City, Pearland and Sugar Land) for the last decade.  For most of the last decade the sales tax growth of a sample of suburban cities has significantly outpaced the City of Houston’s growth.

The difference between the suburbs and Houston has varied over time.  The advantage for the suburbs was widening going into the financial crisis.  However, for reasons not clear to me, the City’s sales tax receipts weathered the financial crisis better than the suburbs.  However, coming out of the crisis, the advantage for the suburbs was rapidly widening again, until this year.

It may be that the narrowing of the advantage for the suburbs may come from the special events that Houston hosted this year (Super Bowl, Final Four, World Series) and flood-repair-related purchases.  The City probably enjoyed something on the order of a $10 million windfall in 2017 sales tax collections from those extraordinary events.   But even backing those out, the difference between the City and its suburbs still narrowed significantly this year.

The growth rates for both have been decelerating since 2014, probably reflecting the slowdown in the energy industry.

 

It is dangerous to draw too many conclusions from this data.  But the picture that seems to be emerging is a region whose growth is slowing and in which the suburbs are significantly outperforming the City.  Of course, there are many factors that go into this dynamic and the past does not necessarily predict the future. But my two take-aways would be that (1) the City needs become more competitive vis-à-vis its neighbors and (2) region needs to redouble its efforts to diversify its economy.

In the near future, I will be looking at how Houston compares to some other major cities.

 

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City Gets Sales Tax Boom to End Year

The Texas Comptroller reported yesterday that the City’s sales tax receipts for December (which reflect October sales) skyrocketed by 17.6%  over last December.  This is the third largest monthly year-over-year increase since I started keeping track in 2008.

It is always dangerous to attribute stark changes in economic data like this to any particular cause, but it seems likely that this increase was driven by Harvey repair purchases.  Anecdotally, my local Home Depot was packed every time I went in for weeks after the storm.  There was also probably some boost from three of the World Series games being played here at the end of October.

The December receipts helped the City finish in positive territory for the calendar year, up 1.4% or about $8 million.  However, sales tax collections are still well off their 2015 all-time high ($659 million vs. $638 million).

This year saw many extraordinary events that affected sales taxes.  We had a Super Bowl, a Final Four, a World Series, a 500-year flood and its aftermath and a tepid oil recovery.  All these make it difficult to draw too many conclusions from this year’s sales tax data.  But the overarching theme seems to be that we are mostly trading sideways, which is, of course, similar to oil market.  Notwithstanding our local chamber of commerce boosters’ boast about we have diversified our economy, I suspect that, for better or worse, our fortunes are still inextricably tied to the energy industry.

 

Of course, there are other factors.  The City continues to bleed off growth to its suburban neighbors (more on that soon) and on-line sales are relentlessly chipping away at sales tax collections.   But if there is any conclusion to be drawn from the recent sales tax data, mine would be that we had better hope the OPEC deal holds and that the oil markets remain steady.

 

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City Comptroller Releases Rebuild Houston Audit: It is a Farce

In the 2015 mayoral election, all of the candidates except Steve Costello agreed that the drainage fee adopted by voters in 2010 had serious problems.  Each of the candidates had various prescriptions.  Turner agreed, expressing his concerns about how the money was being spent and promised a complete review of the program.  Two years later we are still waiting.

In response to some questions from Council, Controller Chris Brown has been promising an “audit” of the Dedicated Drainage and Street Renewal Fund (DDSRF), which was finally released last week.  It is a farce.

The audit examined three projects which totaled about $44 million.  Through the end of this fiscal year, about $1.4 billion will have been deposited into the DDSRF.  So, this audit covers a whopping 3% of the total.  [Click here to read the audit.]

The report includes an appendix which lists 35 projects that it indicates are completed “using the drainage utility fee component” from 2014-2016 at a cost of $246 million.  There is no explanation of that phrase nor are there any supporting schedules.  Presumably, the report is suggesting that these are the projects that were paid for by the drainage fee.  Beyond that, there is no detail other than a general description of the location of these projects and no indication that the audits did any review of them.

Even if we accept that $246 million was spent from the dedicated fund on these projects, that would only be about 76% of the drainage fee collected for those years and only 39% of the total amount deposited into the dedicated fund.  Where was the rest spent?  That was the question we were all hoping an audit would answer.

We used to have a better idea of how the money was spent.  During the Parker Administration, the budget document available to the public had 13 pages of information that included a reasonably detailed description of the expenditures and a list of personnel paid from the fund by position type.  [Click here to read 2015 budget.]  It was from that detail that we were able to determine that most of the positions paid by the fund were office personnel.  But since Turner took office, the budget document has only seven pages and omits most of that detailed information.  [Click here to see 2018 budget.]

The drainage tax was sold to taxpayers on the promise it would be dedicated to alleviate flooding.  Remember this guy telling that us, “The best part is that the politicians cannot divert a single cent.”

 

Since the drainage fund was set up in 2011, Houston taxpayers have paid over $750 million in drainage fees and an additional $650 million has gone into the fund from other taxpayer sources.  Does anyone think we have gotten $1.4 billion worth of value in flood control or street improvement projects?

Reform TIRZs, Don’t Repeal Property Tax Cap

My former colleagues at the Houston Chronicle editorial board opined this week that the City’s property tax cap should be repealed and that the tax increment reinvestment zones (TIRZs) need to be reformed.  [Click here to read.]  They are wrong on the first count but right on the second one.

To begin, let’s get some facts straight that were mangled in the editorial.

First, the City does not have a revenue cap; it has a property tax cap.  Property taxes make up about 25% of the City’s total revenue.  That is the only source of revenue that is limited under the City charter amendment that was approved by voters in 2004.  The other 75% of revenue is not restricted.   There is a cap on all revenues in the charter that was also approved by the voters in 2004, but because the property tax cap got more votes, the City only enforces the property tax cap.

Repeal advocates insist on mischaracterizing the limitation as a “revenue” cap to mislead the public into believing that the City’s ability to raise any form of revenue is impaired by the restriction.  But since the charter amendment was enacted, City revenues have increased by a whopping $2 billion (67%), including the enactment of the drainage fee, which was the largest single tax increase in the City’s history.

Second, the increase in taxes is not “constrained by an arbitrary algorithm.”  The limit is the lesser of population growth and inflation or 4.5%.  Limiting Council’s ability to increase property taxes to population growth and inflation is a reasonable limitation and should be a rough estimate of the need to increase taxes.  If the City’s population and inflation were growing by more than 4.5%, I would have to agree that the limitation is arbitrary.  But because the City’s population has been growing at a very slow pace and inflation has been low since 2004, the 4.5% limitation normally does not come into play.

Third, and most importantly, the property tax cap repeal advocates always omit that the charter amendment begins with this clause: “The City Council shall not, without voter approval . . .”  In other words, in any year that the Mayor and Council believe that the City needs more tax revenue than the limitation allows, all they need to do is ask for the voters’ approval.  If they feel handcuffed by the charter amendment it can only be because they believe they cannot make a credible case to the taxpayers to pay more.

My former colleagues are right about the detrimental effect the TIRZs are having on the City’s finances.  Last year, the TIRZs collected $132 million in property taxes, nearly 14% of the City’s total property taxes.  That is more money than the drainage fee brought in last year.

They are also correct that the taxes collected by the TIRZs are excluded from the property tax cap.  As a result, TIRZ tax receipts have soared.  Last year the property taxes collected by all TIRZs increased 13%.  The receipts for the six richest TIRZs went up by an astonishing 27%!

Of course, the City has devised a number of clever ways to claw back more and more of this revenue over time and subvert the voters’ intention as expressed in the cap.  Each TIRZ pays the City an administrative fee and most make other contributions toward “shared” expenses.  But there is no question that if the City had all of this revenue back, it would go a long way toward solving its long-term structural deficit.

One of the challenges in bringing any of this revenue back to the City is that the TIRZs have been on a debt binge in recent years.  They currently owe around half a billion dollars.  So, much of their revenue is committed to repaying that debt.  Of course, voters had no say in the creation of this debt, notwithstanding that property taxes will be used to repay it.

There are certainly some good projects that are undertaken by the TIRZs.  But increasingly they are grasping for projects on which to spend their largess; witness the idiotic $200 million bus lane project in Uptown.

Of course, our benevolent State Legislature has its finger in all of this.  All of the TIRZs were created by state statute.  So, the State will have to be involved in any restructuring.  Given numerous conflicts of interests between our local delegation and the TIRZs and their first cousins, the management districts, good luck with that.

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City of Houston Sales Taxes Continue to Stagnate

The Texas Comptroller reported yesterday that the City’s sales tax receipts for November (which reflect September sales) were up by 2.3%.  This followed a decline of 3.9% in October.  The October decline was to be anticipated because of Harvey.  However, I had expected to see more of a rebound in November from storm repair purchases.  Perhaps delays from receiving insurance payments have pushed some of those sales out a bit further.

The City had a bump in sales tax receipts early this year from the Super Bowl, with month-over-month increases in March and April of 6.5% and 5.3%, respectively.  But longer term trend appears to be that precipitous decline when oil prices fell has leveled out.

The current City budget projects a 1% increase in sales taxes and it is running only slightly behind that through the first four months of the fiscal year.

Houston continues to  be significantly outperformed by its suburban neighbors.  I have been tracking six cities nearby cities.  Their sales tax receipts were up 9% this month.  I am working on a longer term comparison which I will be sharing with you soon.

If you are interested in looking at sales tax receipts for yourself, you can access that information for any entity in the State [here].

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Court Rules Montrose Management District Illegally Collected $6 Million in Assessments

The trail of TIRZ/Management District horrors continues.  This time it is the Montrose Management District (MMD).

The MMD was formed in 2011 from the merger of two earlier improvement districts which had been authorized by the Legislature.  Since the merger in 2011, MMD has collected over $12 million in assessments from businesses in the Montrose area.  Last week, a District Judge ruled that the petition used by MMD to assess a tax against Montrose businesses did not have the requisite 25 signatures.  Of course, the fact that the Legislature passed a law that would allow as few as 25 property owners to authorize a tax on hundreds of property owners is absurd on its face.  But MMD, according to the Court’s ruling, could not even meet this ridiculously low bar.

Most problematic for MMD is that the Court ruled that it must reimburse the $6.5 million in illegally collected assessments.

[Click [here] to see the Court’s ruling.]

Of course, the MMD does not have anywhere close to $6.5 million.  According to its most recent audit, it only had about $600,000 in cash at year-end and according to recent monthly reports, it appears to have even less now.

But MMD’s problems don’t end there.  After it levied the 2011 assessment, property owners in Montrose began collecting signatures to dissolve the MMD.  According to the statute, that requires property owners owning 75% of the land in the District.  Pretty fair don’t you think?  It only takes 25 property owners to authorize an assessment, but 75% of everyone in the district to undo it.  Just in case you had any doubt about our Legislature being in the bag for these special districts.

Over several years, the dissident owners collected nearly 900 signatures which they contend constitutes over 80% of the land in the MMD.  But when they submitted the petitions, MMD took a page out of the City of Houston’s playbook and invalidated about a third of the signatures.  One of the property owners I interviewed said the MMD invalidated his petition on the four properties he owned without anyone ever contacting him to verify whether he owned the properties or had actually signed the petitions.

When you look at how the MMD has been spending its money you can understand why the vast majority of business owners in Montrose want to dissolve the district.  The following is a table of the revenue and expenses taken from the MMD’s audits.

From 2011-2017, the MMD has collected over $12 million from Montrose businesses and has spent about $11.5 million.  Forty-three percent (43%) of its expenditures, right at $5 million, have been for administrative expenses, legal fees and business development expenses.  The management consultant for the MMD alone has been paid nearly $1.5 million and is currently being paid over $30,000 per month.  No wonder the property owners want to get this monkey off their backs.

Management districts and TIRZs were originally formed to assist neighborhoods with redevelopment.  If they are doing their jobs, they should be welcomed by the businesses and residents they serve.  Increasingly though we are seeing situations like the Uptown TIRZ and now the Montrose Management District where these entities are at war with the neighborhoods they are supposed to be serving.  And to make matters worse, the bureaucrats and lawyers running these districts are getting rich in the process.

Hopefully the next Legislature will take a hard look at these special districts.  But given some of the conflicts of interest that abound with respect to these districts in the Legislature, that may be wishful thinking on my part.  More on that topic soon.

The next meeting of the MMD Board is next Monday (November 13) at noon at University of Saint Thomas, Carol Tatkon Boardroom, 3807 Graustark, Houston, TX 77006.  Parking is available at the Moran Parking Garage.  The vast majority of Montrose business owners who are opposed to the continued existence of this district should show up at this meeting and make it plain to the board:  Go away!

HGAC Tables New Funds for Uptown Bus Project

On Friday, HGAC’s Transportation Policy Council (TPC) tabled a funding request from the Uptown TIRZ for an additional $16 million for its Post Oak bus project.

Several dozen Uptown residents attended the meeting, and several addressed the TPC, voicing their opposition to the project and the request for additional funds.  No one, other than Uptown’s executive director John Breeding, spoke in favor of the request.

 

County Judge Ed Emmett, who has opposed the project from the outset, grilled HGAC officials about the process.  Sugar Land mayor Joe Zimmerman also weighed in with a number of questions.  The principal point of concern was that Uptown had issued a press release claiming that the project was “on budget” and “fully funded”, begging the question of why it was asking for more money. HGAC officials struggled to answer Emmett’s and Zimmerman’s questions.  At one point, an HGAC official said that Uptown had told them in 2013 the project was only going to cost $130 million, compared to the current budget of $200 million.  This is, at least, the third explanation that has been offered in an attempt to justify the additional funding.  I have not found any documentation showing that the costs were ever estimated at $130 million.  But if so, it would be gross incompetence to underestimate the cost by over 50%.

It is hard to know what HGAC will do now, but Harris County Commissioner Steve Radack may have put the final nail in the coffin on the request by ominously calling for HGAC to have outside counsel conduct an investigation to make sure that there are no legal problems with the request or the project.  That legal review is likely to raise a number of questions.  For example, I found this statement in Uptown’s most recent audit:

“As of the June 30, 2016, reporting period, the Authority purchased a parcel of land from WMJK, Ltd. The Authority Director and District Chairman is an owner in this property. The Director filed an affidavit and recused himself from the Board vote. Subsequent to the June 30, 2016 reporting period, the Authority purchased an additional Post Oak Boulevard parcel from a District Director. The Authority has chosen to keep the purchase prices for property acquired along Post Oak Boulevard confidential until the Authority closes each parcel, this information is excepted from disclosure under 552.105 of the Texas Government Code. Total cost of acquisition is available upon request.”  Click [here] to see the complete report.  This related party note is highlighted on page 35.

Now, this all may be perfectly legal.  But the optics of a bunch of wealthy landowners coming to HGAC, begging for more state and federal highway funds, which are desperately needed throughout our region, when they are lining their own pockets and then don’t even want to disclose how much they were paid, is, to say the least, unseemly.

There is an old saying: “Pigs get fat, but hogs get slaughtered.”  Uptown’s overreach on this request may be leading it to the slaughterhouse.  TIRZs were originally created to redevelop “blighted” neighborhoods.  That laudable purpose has increasingly been subverted by special interests which have in many cases turned the TIRZs into opaque quasi-governments frequently benefiting a few at the expense of the public.  And, as is the case here, the TIRZs frequent cram projects down the throats of residents and businesses despite their vehement opposition.  As one of the speakers said on Friday, “This is Robin Hood in reverse.  We are stealing from the poor and giving to the rich.”

It is past time that we re-examine the whole TIRZ/Management District paradigm.  I am sure there is some good work that is carried out by some of these organizations.  But the case for their existence – as entities wholly unaccountable to taxpayers or the public – is becoming increasingly tenuous.

 The Texas Monitor has more at https://texasmonitor.org/uptowns-funding-bus-project-shelved-john-breeding/.

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City Bond Election: Pension Bonds – YES / Improvement Bonds – NO

As many of you are aware, the City will hold a bond election on November 7.  Early voting begins next Monday, October 23.  There will be five bond propositions (A-E).  The first (A) seeks approval to issue $1 billion in bonds to shore up the police and municipal pension plans.  The other four (B-E) are “improvement” bonds asking mostly for funding for the purchase of police and fire vehicles, and improvements to City parks, health clinics and libraries.  I intend to reluctantly vote for Proposition A and against Propositions B-E.

Proposition A – $1 Billion Pension Bond

Some of you will recall that during the campaign I advocated using pension bonds to refinance the City’s debt to the pension plans.  But I said bonds should only be used as part of a plan that would convert the City from defined benefit to defined contribution plans.  Notwithstanding that over 70% of Houstonians favored moving new employees to defined contribution plans, we did not get that in the bill that was passed in the Legislature.  As a result, we are destined to revisit this issue again one day.

Even though defined contribution plans are not part of the “reform,” I believe the better course is to approve these bonds.  They are part of a trade the City made with the police and municipal unions that both reduces their benefits and requires greater contributions from their members.  There is some disagreement over exactly how much the City will save, but it is substantial – roughly double the amount of the bonds.  That is a reasonable deal.  It is not a solution to our pension problems.  But when we are forced to deal with this issue again, these changes will make the problem less severe at that time.

There are many in the pension reform movement that intend to vote against the pension bonds as a matter of principle, preferring to precipitate a fiscal crisis that would result in real pension reform.  While I am sympathetic to that point of view, I have concluded that the damage that would be done to the City and to individual citizens is too great.  So, I am going to hold my nose and vote for the pension bonds.  But I certainly understand how others may have a different view.

Propositions B-E – $495 Million Improvement Bonds

Propositions B-E are a grab bag of various expenditures.  However, there is not one penny in the package for streets or flooding.  This will be the City’s second bond election (the first was in 2012) that does not include any money for streets or flooding because of the City’s misguided reliance on a “pay-as-you-go” model coming out of the 2011 drainage fee fiasco.  Since we adopted that model, our streets have continued to deteriorate.   And I don’t think I even need to say anything about the flooding since then.  Until the City gets its act together on fixing our streets and addressing our flooding problem, I am not voting to give them one more dime for anything else.

Instead the city is proposing to spend over $115 million for new vehicles and another roughly $200 million for repairs and renovations, which appear to mostly be deferred maintenance.  The itemized uses also include:

  • $7 million in “salary recovery” costs (Read: “We are going to use bond money to try and balance the general fund.”)
  • $2 million for bike plan implementation
  • $350,000 to replace TVs and lighting in City Hall
  • $1.2 million in facility assessments
  • $296,000 for park design services
  • $2 million for playground equipment and ball field lighting.

Regardless of the merits of these various expenditures, it is absurd to finance them over the 34 years that the City is proposing.  And I know you will be shocked to learn that the amortization schedule that the City plans to use back-end loads the payments, conveniently pushing off the peak of the payments until all the current elected officials will be safely out of office.  (By the way the same is true for the pension bonds.)

This is exactly the kind of financial can-kicking that has gotten the City into the fiscal mess it is in today.

Until the City puts its fiscal house in order by adopting zero-based budgeting, consolidating overlapping functions with the County, ending the diversion of drainage money to balance its budget, and reducing its per-employee compensation cost (currently $94,000 per employee), to mention but a few examples – and until the City gets it priorities in order, Houston taxpayers should go on strike.  No more bonds.  No property tax increase.

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Uptown Bus Lanes Already $30 Million Over Budget

     One of the worst public works boondoggles in our region is about to get worse unless our elected officials step in.  In 2014, the Uptown TIRZ proposed to build dedicated bus lanes down the middle of Post Oak Boulevard.   The cost of the project at that time was estimated to be $196 million, with over half that amount coming from local property taxes and the balance coming from State and federal transportation funds.  Last week, the Uptown TIRZ went to the Transportation Policy Council asking for an additional $30 million for the project.  And trust me, this will not be the last time Uptown comes back with its hand out.
     Most of you have probably never heard of the Transportation Policy Council (TPC), but it wields enormous influence over regional mobility projects.  It is a committee of the Houston Galveston Area Council (HGAC), which is one of twenty-four regional councils of local governments that were established by the Texas Legislature.  Transportation policy councils in each of these regional organizations are made up of local officials who allocate State and federal transportation funds to various road and transit projects within their regions.
     There are 27 members on our TPC.  Most are elected officials but there are also some appointed positions (such as the Metro chair and TXDOT’s district engineer).   You can see a complete list of the members [here].
     The TPC was notified of Uptown’s request for additional State funds on September 22.  Because of the size of the request, it could not be approved until the following meeting.  Fortunately, both County Judge Ed Emmett and Commissioner Steve Radack expressed concerns about the budget overrun in the meeting.  From their comments, it appears they will likely vote against bailing out Uptown, especially since Emmett voted against the project originally.  You can watch the video of the meeting [here].  Uptown’s request is discussed in agenda item number 5.
     Personally, I am very skeptical that the proposed bus lanes will ever achieve the projected ridership or congestion mitigation Uptown claims.  We have seen time and again that ridership projections are almost always overly optimistic.  Of particular concern is that the project is based on the assumption that commuters will either drive their car or take a park-and-ride to one of the ends of the bus lanes, then switch to the buses for the final leg of their trip.  In the transit world this is known as “two-seat trip”, meaning that the commuter must change modes during trip.  Historically, commuters have been reluctant to take two-seat trips except in the most congested areas, such as Manhattan.
     And the project will undoubtedly impede the flow of vehicular traffic in the Galleria.  There is a particularly problematic proposed interchange at Post Oak and the Loop where the bus lanes will transition onto the Loop.  I cannot imagine that traffic will not be permanently snarled at that intersection.
     But regardless of the future effectiveness of the project, it is simply an idiotic use of $200 million of taxpayer money.  I could come up with a list of at least 100 other transportation projects that would represent a better value.
     This project was pushed through by TIRZ bureaucrats trying to justify their existence and special interests along Post Oak, some of whom have received multi-million dollar right-of-way payouts.  It is wildly unpopular with most of the businesses along Post Oak and residents in the Galleria.  Post Oak went from being one of our signature boulevards to a war zone.  I cannot even imagine what a nightmare the traffic is going to be during the holiday season.
     Much of the work that has been done so far is utility work and right-of-way expansion.  Almost nothing has been done to actually begin construction of the bus lanes, which means that it is not too late to scrap this project.  A good step in that direction would be for the TPC to turn down Uptown’s request for additional funding.
     So, I am encouraging everyone to first call Judge Emmett and Commissioner Radack to congratulate them on questioning the request and to encourage them to vote against it when it comes back to the TPC for final approval.  You might also consider calling Houston City Council Members David Robinson and Larry Green, who also serve on the TPC, and ask them to vote against the increase.
     Finally, it is also time for residents in the Galleria to make it clear to the Uptown board that they are opposed to this project.  You can reach the Uptown office at 713-621-2011 or you can email it [here].   You can see a list of their directors at http://www.uptown-houston.com/about/page/tirz-uda-board.  If you know any of these members, call them and let them know you are opposed to the project.
     This project is crony capitalism at its worst.  TIRZs were originally established to help “blighted” neighborhoods.  This project is using $200 million of taxpayer money to subsidize a project intended to benefit the most expensive real estate in the City.  In the meantime, there are many neighborhoods in our City going begging for basic services, like flood control projects!
It is time to put an end to this boondoggle.
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Many Questions Need to be Answered Before Raising the City’s Taxes

    Harvey was an extraordinary event and calls for an extraordinary response.  That response may include raising more revenue for flood projects in our region.  But the proposal by Sylvester Turner for City Council to immediately raise the City’s property taxes by $113 million raises a number of troubling question.

    First, let’s not kid ourselves that his money is going to be used to stem flooding.  Since 2012, the City has collected about $800 million in “drainage fees.”  A tiny fraction of that money has actually been spent on flood control projects.  Trust me, none of this $113 million will be.

     Under the property tax cap charter amendment, City Council can raise additional property tax revenue over the cap by an amount “necessitated by city expenditures related to the inclusion of the city in any declaration of an emergency or disaster.

     Therefore, the threshold question must be:  How is the $113 million going to be spent?  The only explanations we have gotten so far is that the City will have to pony up about $20 million for it share of debris removal expenses, needs to replace about 300 flooded vehicles and repair some unspecified damages to some of the City’s facilities.  But we have a $20 million “rainy day fund” (recently renamed the Budget Stabilization Fund) for exactly this purpose.  And it should not cost more than about $15 million to replace 300 vehicles.  So where is the rest of the money going?

     And were any of those losses covered by insurance?  I found a note in the 2016 Annual Report that appears to suggest that the City is covered for any flood losses over $10 million.  I do not know if that is actually the case or not.  But if we do not have any coverage, why not?  (And for that matter, why were over 300+ vehicles left where they would be flooded in the first place?)  

     How much of these expenses will be covered by donations?  Are there alternatives to raising taxes?  Can some of the TIRZ money be tapped?  City reports show there is about a $50 million fund balance in the “dedicated” drainage fund.  Can that be used?  

     City Council has an obligation under the charter to demand an accounting of what expenses are necessitated by the disaster before voting to suspend the cap.  To do otherwise raises the question of whether this whole exercise is just a pretext to accomplish what the advocates of repealing the property tax cap knew they could not do at the ballot box.

    There are two things that make me suspicious this is just such a pretext.   First, the increase is exactly (to the one-hundredth percent) the amount the tax rate has been decreased because of the property tax cap.  Are we to believe that the city expenditures necessitated by the storm just happen to come out to that exact number?  

     Second, Turner’s main surrogate for the repeal of the property tax cap, Council Member Dwight Boykins, made a telling statement.  He told the Houston Chronicle, “Anything to bust that damn rev cap, I’m in.

    I think Boykins statement reflects the true opinion of many at City Hall.  They resent that Houston taxpayers have limited the amount that they can increase the property tax and will use any device or excuse to get rid of the cap, including exploiting a natural disaster.  

     I think it is also noteworthy that no other taxing jurisdiction in our area has proposed increasing taxes in response to Harvey.  The County and HISD both had more severe damages to their facilities, as did several of our sister cities on a relative basis.  Why is the City of Houston the only jurisdiction that needs to immediately raise its taxes.

    There could also be an unintended consequence from a tax increase.  It could spark a taxpayer backlash that will show up at the polls in the November for the City’s bond election.  My guess is that the improvement bonds are already in trouble since they have no money for streets or drainage.  But this could also imperil the passage of the pension bonds, which have, at least to now, enjoyed a comfortable margin of support.  The additional revenue from this tax increase will pale in comparison to the costs if the City is forced to go back to the drawing board on pensions.  

     Many in this City are hurting right now.  True, the proposed tax increase will not make a significant difference to most.  But the optics of the City piling on to their misfortune are ugly and will do much to unravel the unity we have found through this ordeal.

    And it is $113 million that the City Council will decide how to spend instead of taxpayers.  That is $113 million less for Houstonians to repair damaged homes, replace flooded items and give to charities.  

     Every tax dollar is a precious trust and especially so under these circumstances.  There may be a case for the City increasing taxes.  But that case has yet to be made.