King: City budget in deficit since 2004
Today's Chronicle ran an op-ed from Bill King, the businessman and former mayor of Kemah who reportedly considered running for mayor and city council in Houston but decided against it. While we are all familiar with the notion that the City of Houston's budget is technically "balanced," King points out some problems with the way city officials have constructed the current budget "balance":
The city’s 2009 budget projects that the city will have general fund revenues of $1.84 billion. These revenues are derived from property taxes, sales taxes, fees and fines and certain miscellaneous categories such as interfund transfers and the sale of capital assets. However, general expenses were originally budgeted at $1.93 billion, leaving a projected deficit of about $70 million. The budget called for this shortfall to be made up by borrowing $20 million and reducing the city’s general fund balance (the amount we have left over in the bank at the end of the year) by about $50 million. In other words, the budget was “balanced” by borrowing money and going into our savings.
However, since the budget was adopted projected revenues have been falling and are now estimated to be about $30 million to $40 million less than originally expected. The city has reduced budget expenses by about $10 million, leaving a projected general fund deficit of $90 million to $100 million.
In the January monthly report, the controller included a line entitled “Amount Needed to Balance the Budget” in the amount of $64 million. (See this document.) In the February report, after the controller had declared that the budget was balanced, this line was euphemistically renamed “Budgeted Decrease in Fund Balance.” (See this document.)
The fact that the city is running this kind of deficit may be surprising to many readers. But the city has actually run deficits, albeit much smaller ones, since 2004.
Hmm, hasn't someone who proposed to run the city like a business been mayor of Houston since 2004? And might that pol, who is busy running for his next office, be more than happy to leave this problem for his successor to solve a few years down the road? Those are just questions -- you tell us.
And be sure to read all of King's provocative op-ed, because it will be up to citizens to try to get the current crop of mayoral candidates to focus on substantive issues like this one, as opposed to pandering to whatever special interest is sponsoring them on any given evening.
BLOGVERSATION: Lose an Eye, It's a Sport (and here).
Posted by Kevin Whited @ 05/07/09 10:22 PM | Houston Miscellany | Print | Comments (2)
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