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Houston City Council passes $6.7 billion budget for fiscal year 2025

By Indira Zaldviar & Edward Saenz

The Houston City Council, in a 15-2 vote, approved the city’s $6.7 billion Fiscal Year 2025 (FY25) operating budget on Wednesday.

The budget supports the city’s workforce of over 21,000 employees, which includes 10,000 police and fire personnel, and 11,000 municipal workers.

One of the amendments approved by the City Council will fund a local drainage program, allocating an additional $8 million from the city’s general fund. This amendment was presented by Council Member Tarsha Jackson and received support from several others, including Council Members Amy Peck and Abbie Kamin.

Key highlights of the FY25 budget include:

  • $187 million drawn from the city’s ending fund balance to cover the existing budget gap in the $3.03 billion General Fund (tax-supported budget)
  • Pay increases for police (3.5%) and fire (10% proposed) – municipal employee contract negotiations are currently underway
  • $30.6 million for debt service related to the draft proposed firefighter settlement and an additional $10 million increase in firefighter incentive pay
  • $36 million to cover the first year of raises in the proposed firefighter collective bargaining agreement
  • $11.7 million in General Fund budget reductions to achieve cost savings and efficiencies
  • Funding for five police cadet classes and five fire cadet classes; an additional HPD cadet class was added via amendment
  • $25 million set aside in the budget stabilization fund to address natural disasters and emergencies
  • $135 million transferred from property tax revenue to street and drainage projects, plus $8 million more via amendment
  • $475 million in police, fire, and municipal employee pension costs
  • Ending General Fund balance of $280 million, which is 11% of expenditures less debt, $91 million above the required 7.5% established in the city’s financial policies

The operating budgets of key departments are as follows:

The budget emphasizes public safety, drainage, and infrastructure improvements, including installing generators at multiservice centers to protect residents during extreme weather. Notably, the budget does not introduce any new fees or tax hikes.

“This is a responsible budget that we can present to the public,” said Mayor Whitmire, emphasizing his commitment to transparency and fiscal responsibility.

The FY25 General Fund Expenditure Budget totals $3.03 billion, an increase of $74.3 million, including a $12 million rise from adopted budget amendments. This increase, the smallest in four years, reflects the administration’s strong financial management, keeping expenditure growth below the inflation rate.

“This budget is paid for. As we move through the next months into the fall, we will eliminate duplication and waste, conduct audit reviews, and present a good government proposal to the citizens of Houston, collaborating at the county, state, and federal levels,” said Mayor Whitmire. “Let everyone know we have a great city and great people, but we have challenges, and if we meet those challenges, we will have a very bright future for our young people.”

The new fiscal year begins on July 1, 2024.

Additionally, during Wednesday’s meeting, the City Council approved a historic bond agreement to finance backpay and other benefits owed to Houston firefighters. However, the council did not vote on a proposed collective bargaining agreement as the City Controller had not certified the funds needed to cover it. This item is expected to be on next week’s city council agenda.