Governor Abbott pulled $50 million out of his suit pocket.EXPAND
Governor Abbott pulled $50 million out of his suit pocket.
Photo by Meagan Flynn

After a $50 Million Gift from Abbott, Mayor Turner Drops Property Tax Hike Proposal

In a borderline about-face, Governor Greg Abbott has changed his mind and will now agree to immediately assist Houston with Harvey relief funds — meaning, in keeping his promise, Mayor Sylvester Turner will no longer seek a property-tax hike for 2018.

Abbott handed Turner a $50 million check on Friday at City Hall, which came out of his office's disaster relief fund, and vowed to continue working with Turner. Which is largely a change in his tone since as early as three days ago, when he accused Turner of using Harvey recovery as a "hostage" in order to get what he really wanted: more tax revenue.

On Monday, Turner had sent Abbott a letter asking him to tap the Rainy Day Fund — formally called the Texas Economic Stabilization Fund — to go toward recovery, since the costs to many municipalities, not just Houston, will likely exceed their budgets. But on Tuesday, Abbott sharply declined Turner's request during a press conference, when he made the snide remark about the mayor's alleged motives and said Houston already had plenty of available funding sources to make post-Harvey repairs. On Wednesday, Abbott clarified in writing that he would not tap the Rainy Day Fund, largely because the full financial impact of Harvey was not yet understood.

On Friday, however, during a joint press conference at Houston City Hall, Abbott said he had Houston's back, and that the state would be stepping up to address cities' urgent needs as they come up.

"One thing we're doing is making sure that, when there are shortfalls, we are going to be here prepared to assist our communities and make sure that they are going to be able to rebuild as quickly as possible," Abbott said.
"[Mayor Turner] and I speak frequently, and he let me know that the City of Houston has some urgent needs that need to be addressed, and part of it is debris and some other things. It totaled $50 million, and I said, 'This is what the State of Texas is for and what we can do. We are here to help you and help you rebuild, because we are one team together.'"

Turner had promised Houstonians that, if the state were to assist Houston with Harvey relief funding, he would withdraw his proposal to increase property taxes next year. The tax hike would mean the average Houston homeowner would be paying an extra $48 in property taxes, for only one year, and would allow Houston to rake in an extra $50 million. Turner was allowed to exceed the revenue cap, which limits how much Houston can collect in property taxes, because a federal disaster declaration was issued for the city.

Now, however, with help from Abbott, Houston won't be needing that extra $50 million from residents.

"Because of our needs directly related to Hurricane Harvey and the rain from that, I had proposed that we needed to do some additional things in order to generate the revenue just to mitigate against some of the costs. This check does address some of those immediate concerns I would have been asking people in this city, many of whom have been directly impacted and are having to try to get back into their homes and repurchase furniture, to assume some of the sacrifice to rebuild this city. Because of what you have given today, let me say there will be no need for me to do that."

In his letter to Abbott Monday, Turner identified three specific ways he would use $50 million. First, with debris cleanup costs expected to be between $250 and $260 million and FEMA only picking up 90 percent of the tab, Houston will likely be stuck with a $25 or $26 million bill. Damage to city buildings is now in the ballpark of $175 million, Turner said — but the city's flood insurance policy caps out at $100 million. To purchase more flood insurance to last through April 2018, that'll cost another $10 million. And to recover on damages, Houston must pay a $15 million deductible.

Asked why he seemed to reject Mayor Turner's request earlier in the week and then change his mind later, Abbott said he wanted to consider all of the options first before making a decision — then changed gears to discuss the role of Congress. Here is his response to our question, in full:

"What I was suggesting before was what I suggest all the time, and that is, as we move forward, as we address these funding-based issues, we need to consider all options on the table. After looking at all the options, this looked like the best solution at this point in time. That’s what we’ll do for cities and counties across the entire region. It’s not just Houston that has needs. It’s not just Harris County that has needs. There are counties and cities across the entire area that have needs, and we will maintain the flexibility that we have under the disaster-based laws in the state of Texas to make sure disaster needs are met — with this very important understanding, and that is, as I emphasized earlier, the Rainy Day Fund is a tiny fraction of what the rebuilding cost will be, and there’s no way we have any ability to rebuild without the profound efforts by Congress demonstrated in the aftermath of Katrina and Sandy.

"If we’re just gonna rebuild in the way we were, it would take a monumental effort by Congress. If we’re gonna rebuild in a way that will protect not only the Texas economy but the national economy, we need to rebuild in a way that will prevent catastrophic flooding in the future, and that will require Congress living up to what Senator Cornyn, Senator Cruz and the rest of the Texas delegation has been working on. I think we can do it, because if you look at what happened here, just the rise in the price of gasoline costs Americans as a whole a hundred million dollars a day, over all more than a billion dollars. If the Texas economy is hit, the national economy is hit. So this is more than just a Houston issue or a Texas issue. It’s a national issue."

Mayor Turner also joked that Abbott possibly changed his mind because it is his birthday week (Turner turned 62 on Wednesday).

Abbott said that state leaders have agreed that tapping the Rainy Day Fund will be absolutely necessary — but still maintained that now was not the time. The state has other means to provide local governments financial assistance, like through the governor's disaster relief fund or through approval from the Legislative Budget Board to dish out funds from state agencies, then reimburse them later.

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