Priya Patel
Houston Finance Director Melissa Dubowski is prioritizing addressing the city’s structural budget gap. The upcoming fiscal 2025 budget will take some initial steps to address a gap of about $158 million. Dubowski stated that a combination of expenditure reductions, identifying new revenue sources, and maximizing current funding will be necessary. The city ended fiscal 2023 with a strong budget balance of $550 million, thanks in part to federal stimulus funding. Contract negotiations with city firefighters will also impact the budget, with talks ongoing and a deal hoped to be reached by March.
Public safety is the largest expense for the Houston budget, with property and sales taxes providing the largest revenue sources. Dubowski mentioned that options like repealing or modifying the property tax collection cap could be considered. Additionally, the city is evaluating a $2.6 billion financing for a major renovation of George Bush Intercontinental Airport’s Terminal B. However, Texas laws that prohibit government contracts with companies that “boycott” or “discriminate” against the fossil fuel or firearm industries could impact capital projects financed through commercial paper.
Lastly, Dubowski noted that Houston’s pool of eligible banks for financing could be shrinking due to the banks’ involvement with the Net Zero Alliance, which aims for net-zero greenhouse gas emissions by 2050. Several large banks have already been banned, leading to potential increased costs for Houston. The city had $646.4 million of commercial paper outstanding at the end of fiscal 2023.
