Houston Is So Broke That They’re Struggling To Pay Firefighters – But Mayor John Whitmire Has A Plan

Source: Jay Janner

Mayor John Whitmire is getting real about Houston’s financial situation – and he wasn’t painting a pretty picture. According to him, the city is broke, and extreme measures are needed if they want to minimize the blow. Here’s what this means for Houston residents, and other cities who might have it worse right now. 

Houston Facing A $160 Million Deficit

Houston, we have a problem—those weren’t Mayor Whitmire’s exact words, but they’re pretty close. The 74-year-old Democrat admitted that his city is facing a $160 million deficit as the financial challenges continue to grow in a tough economy. 

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“I think we can all agree on that, we are broke,” Whitmire said at a recent City Council meeting. “This gives us a chance to discuss the financial picture of this City. It is broken! It was broken when I got here.”

Mayor Whitmire Proposes 5% Cut Across-The-Board

The Mayor’s multifaceted plan continues to evolve, but one of the things he’s prepared to do is implement a 5% budget cut across all government sectors to stabilize the city’s finances—the only sectors not affected are firefighters and police officers. 

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“I don’t like a 5% cut now, but you have to make tough decisions and folks put me in this position to make tough decisions, and I’m going to do my job,” Whitmire said.

Settles With Firefighters For Seven Years Of Back Pay

The meeting came just one week after Whitmire announced a historic $650 million settlement with the Houston Professional Firefighters Association. The settlement resolved nearly seven years of backpay and set aside an additional $180 million for five years of wage hikes. 

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“This is a long-awaited day,” said HPFA President Patrick M. “Marty” Lancton. “The credit goes to Mayor Whitmire and his leadership, and I don’t know that I have enough words to express how good it feels to have this resolved once and for all and for us to be able to move forward.”

Councilman Willie Davis Supports Firefighter Settlement

According to City Council Member Willie Davis, the settlement is going to ‘come down to a financial sacrifice by the City,’ but he wants residents to know it could be worse. “Now we can either be $1.2 billion broke, or we can be $650 million broke,” he added.

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Some experts – and plenty of Houstonians – wanted to see the Mayor defer to voters instead of taking sole responsibility for a problem he inherited, but those same experts agreed that the voters would’ve approved the settlement without hesitation. 

Councilwoman Tiffany Thomas Expresses Concern

Some City Council Members – including Councilwoman Tiffany Thomas – expressed concern over the mounting deficit. Thomas was one of the few who wanted a more concrete plan, especially since they had so many options at their disposal. 

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“Are we going to fee Houstonians? Is it a trash fee? Are we paying for parking after six? Are we going after Metro’s money? I mean, what are we doing?” Thomas asked during the recent City Council meeting. 

Two Council Members Say Situation Isn’t That Dire

In an interview with ABC13 earlier this week, two council members disagreed with Whitmire’s assessment of the city’s financial situation – claiming that it wasn’t as dire as he made it out to seem. 

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“I don’t necessarily believe that the city is broke,” said District J Councilman Edward Pollard, while Tiffany D. Thomas of District F added, “I challenge that position, and I think that’s the wrong language that we need to send out.”

Houston Considering Borrowing Money Through Bonds

Not only is Houston facing a major deficit, but the city (like most cities) still has a lot that needs to be funded – such as roads, infrastructure, etc. One way the city plans on funding these things is through bonds. 

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During last week’s meeting, city council members discussed the possibility – giving Houston the ability to ask for bonds on pretty much any topic and approving a bond to help fund the airport system. 

They Need To Avoid Kicking The Can Down The Road

John Diamond, director of the Center for Public Finance Director at Rice University, warned that this has been an ongoing problem for more than 20 years. While COVID-19 disguised the issue thanks to all the money they received from the federal government, the problem hasn’t gone away. 

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“There’s a lot that needs to be funded. There are a lot of roads that need to be redone, there’s a lot of city infrastructure that needs to be redone, and we don’t have the money to do it. The only thing we can do at this point is borrow,” Diamond said. 

How Often Do Cities Go Broke? 

Believe it or not, what Houston is experiencing right now is similar to what many cities and municipalities have experienced over the past 100 years. In fact, nearly 1,000 cities have declared for bankruptcy since 1930. 

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Some of the most famous examples include Stockton, CA in 2012, Bridgeport, CT in 1991 (the first major city to do so), Vallejo, CA in 2008, Harrisburg, PA in 2011, and Prichard, AL in 2009 (its second time filing for bankruptcy). 

2023 Report: Sunshine Cities vs. Sinkhole Cities

A 2023 report by Truth In Accounting compared some of the country’s most profitable cities to some of the poorest based on ‘taxpayer burden,’ which is the amount of money each taxpayer would have to contribute if the city were to pay all of its debt.

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The report defined a sunshine city as one that would have money left over to pay its taxpayers a surplus. A sinkhole city would need its taxpayers to fork over funds to help pay off its debt. 

Washington D.C. and San Francisco Among The Best

Washington D.C. and San Francisco were the two biggest ‘sunshine cities’ in the country. Washington D.C. would have enough money to pay each of its taxpayers $14,000, while San Francisco would have about half of that at $7,700. 

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Other cities that ranked in the top five are Irvine, Texas ($5,400), Los Angeles, California ($5,000), and Fresno, California ($4,900). Keep in mind, the report only looked at the top 75 largest cities in the US. 

New York City and Chicago Among The Worst

Two of the worst cities were New York City and Chicago. If it were to pay off its debt today, New York City’s taxpayers would need to contribute $56,900 each. Meanwhile, Chicago residents would need to pay $41,900. 

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Other cities in the bottom five are Honolulu, Hawai’i ($26,100), Portland, Oregon ($23,400), and New Orleans, Louisiana ($22,800). Philadelphia, Pennsylvania is the only other city that rated above $20,000. 

Houston Ranked Among The Bottom 20

So, how did Houston, Texas, rank in that report? First, it ranked as a sinkhole city—which comes as no surprise given its current deficit. Second, Houston residents would need to pay $8,900 each to pay off city debt. 

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The report gave Houston a ‘D’ grade for fiscal health with more than $6 billion needed to pay off its bills. “Houston could struggle to maintain current levels of government services and benefits without further negative impact on its financial health,” they wrote in the report.

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Ryan Handson

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