Further COVID-19 Fallout: Houston Has To Counter $169 Million Budget Gap and More Cases

Drastic measures, Part II. Now comes the belt-tightening.
Drastic measures, Part II. Now comes the belt-tightening. Screenshot
Houston Mayor Sylvester Turner had mentioned in passing in press conferences before that as of July 1 there would be furloughs because of COVID-19's effects on the economy. Tuesday he got more specific, saying 3,000 city employees will be furloughed at a savings of about $7 million.

It's all part of his plan to close an anticipated $169 million gap between revenues and expenses in the 2021 city budget. And with an estimated 65 percent of the city's expenses going toward personnel, that's where he's looking to make up a chunk of the difference.  Similar drastic steps are being taken by cities throughout the country in response to COVID-19-related budget shortfalls.

"To address this budgetary crisis caused by COVID-19 the city has undesignated $20 million from the budget stabilization fund, $15 million will be used to balance the budget and $5 million has already been transferred to the COVID-19 disaster fund," Turner said.

"What does this mean for the city of Houston? As we approach the hurricane season, it means the economic stabilization fund is down to zero which places us in a precarious financial state for the upcoming hurricane season," he said, adding later: "There is no rainy day fund."

While he won't be furloughing any police, fire or trash pick-up personnel, Turner is postponing five police cadet classes. Turner estimated the city will lose close to $100 million in sales tax revenue between this fiscal year and the next thanks to lost jobs, business closures and an oil and gas industry in significant distress.

"The city of Houston must operate under the property tax revenue cap while contending with the loss of revenues from COVID-19 in 20-21 and possibly beyond," Turner said, "As we move forward in this budgetary process we will continue to look at the federal guidelines to see whether or not additional dollars can be drawn form the CARES Act not to cover revenue losses but possibly to recover costs where employees were redeployed from their regular duties in order to do things for COVID-19."

If the city is able to use more of the COVID-19 stimulus money, Turner said his No. 1 priority would be restoring the police cadet classes, followed by eliminating the ten-day furloughs and then returning the city's fund balance [the amount set aside by the city against disasters, emergencies and economic instability. Houston's minimum is supposed to be 7.5 percent of General Fund expenditures]  to 7.5 percent or above and to return money to the economic stabilization fund. 

"This budget does balance despite the tough financial challenges," Turner said. "This budget provides funding for overtime for police, three cadet classes for fire, funding for parks, libraries, trash pickup and upgrades to our drainage and streets but it is a lean budget and for me it is the toughest budget I've had to put together since I've been mayor starting in January of 2016."  The budget for all funds totals $5.1 billion, an increase of $62.2 million or 1.2 percent. The proposed General Fund budget is $2.53 billion, a decrease in spending of $22.17 million over the current budget.

Tuesday was also a day when Turner announced another 153 positive cases of coronavirus and one death, in the city bringing the death count to 101. "This an Hispanic male in his 30s with underlying medical conditions. Yesterday we had someone between the ages of 10 and 19, the youngest in the city of Houston. This is a reminder that this virus doesn't discriminate in terms of age."

Turner said he'll be tested for the coronavirus in the next week which follows the news that Councilwoman Letitia Plummer who found out Monday she'd tested positive for COVID-19. Turner said councilmembers were in agreement that they should go virtual in their meetings for the next couple of weeks. "And then we'll see how we go from there."

Asked what he was going to do if there are more coronavirus cases across the city than expected, Turner said, "We're watching and monitoring the numbers very carefully.

"I will tell you in February, March and April as the mayor of the city of Houston, I had the ability to say stay home, and suspend the service at restaurants, bars, clubs. I had that ability as the mayor of the city of Houston and as the CEO of the city of Houston. I no longer have the ability to put forth an order to tell you to stay home. The governor has assumed that responsibility.

"So what we can do is that we can monitor the numbers, we can look at the data, we can continue to confer with the doctors and the medical experts and so when we see that things are spiking up — and hopefully they will not , my hope is they will not — but if we see things starting to change I won't hesitate for example to contact the state and urge the governor to take definitive steps to get on top of the situation," Turner said.

Once again, however, Turner urger residents to proceed slowly and cautiously before embracing the re-opening of Texas called for by Gov. Abbott.

"This is all about managing the virus until we have a vaccine. I think we can open up safely if we're very measured," Turner said. "We took steps to blunt the progression of the virus, to flatten it. We didn't eliminate it, we simply flattened it, we suppressed it, but in doing so a lot of people's lives were saved and our numbers relatively speaking were low when compared to other cities our size.

"But what we have done is not the vaccine."

"And as people move forward in some cases in what I call 'reckless abandonment' as if the virus is no longer present,  the virus is going to remind us: it never left the scene. The virus has its own way of reminding you 'I never left,'" Turner said.

"I'm all in favor of going forward But we just can;'t do it as if the virus doesn't exist," Turner said, "That's why I’m disappointed, for example, that we have an order [to wear masks while out in public from Harris County Judge Lina Hidalgo] but it has nothing in it, there’s no enforcement in it [after Abbott removed any penalties for violators]. It's important for the messaging of all of the leaders, at the federal, state and local level, as much as possible we need to be on the same page with the same message otherwise it becomes confusing and people don’t know what to believe."
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Margaret Downing is the editor-in-chief who oversees the Houston Press newsroom and its online publication. She frequently writes on a wide range of subjects.
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