The Houston City Council on Wednesday cemented plans to lay off 747 employees, reduce library hours and slow the pace of health inspections in approving a $1.8 billion general fund budget that cuts $100 million in spending in the upcoming year.
The overall spending plan totals $4 billion, including $1.8 billion from the tax- and fee-supported general fund. The remaining $2.2 billion involves the city’s enterprise funds, such as the airport and water utilities divisions, which generate their own revenues through user fees.
Fiscal year 2012 begins July 1.
The Council considered dozens of amendments during several hours of discussion Wednesday, but adopted the mayor’s proposed budget with no substantive changes.
Mayor Annise Parker spent the spring looking for ways to close a huge budget gap caused, in part, by a decrease in tax collections and ballooning pension obligations. She balanced the budget without a tax increase.
HPD, HFD take worst hits
Instead, the newly adopted budget calls for spending $100 million less than in the current fiscal year. Because the city spends most of its money on police and fire protection, those two departments took the biggest hits, but no police officers or firefighters were laid off.
Even with such a large decrease in spending, city government does not plan many dramatic cuts in service to the 2.1 million people it serves. The budget reduces library hours, slows the pace of health inspections and may close some police storefronts, for example.
The most visible effect of the cuts would have been Parker’s proposed closure of eight pools and seven community centers, but private donations announced earlier this week will keep them open through the summer.
Though the budget does not borrow money to pay pension obligations nor tap the city’s reserve account as the budgets under previous Mayor Bill White did, the second Parker budget does defer tens of millions of dollars in bills. A deal with the police pension board allows the city to put off $17 million in pension contributions for three years. Another deal with the firefighters’ union allows the city to put off most of the lump-sum payments for accumulated time off to firefighters who leave the department. The city instead will make those payments over four years, deferring an estimated $10 million from the fiscal 2012 budget.
The city also spun off its Convention and Entertainment Facilities Department into a local government corporation that will pay the city $10 million in what originally was called five years’ worth of rent but now is labeled an inducement fee.
‘Not out of the woods’
The mayor said the city’s budget situation will remain challenging as long as the national economy falters.
“We are dependent on what happens nationally. Until hiring picks up, which drives sales tax, which will drive our property values and everything else, we are not out of the woods,” Parker said.
Her budget calls for 3 percent cuts to council office budgets. Councilwoman Wanda Adams proposed raising those office budgets to offset increased costs for pensions, benefits and a new time-keeping system.
Adams said the proposed budget would force her to lay off an employee at a time when redistricting has corralled into her District D 67,000 people she did not previously represent.
“I had to stand up, not only for my staff, but for my constituents,” Adams said. The Council voted 11-3 against her amendment.