Houston City Council members clash over property tax hike – Houston Public Media

Lucio Vasquez / Houston Public Media

Houston residents are unlikely to see a property tax rate hike after more City Council members voiced opposition to an increase at the weekly meeting on Wednesday.

The tax rate wasn’t on the agenda, but Council Member Joaquin Martinez raised the issue at the end of the meeting. He pointed out the city’s tax rate has decreased steadily over the last decade, from 63 cents per $100 valuation in 2015 to 52 cents in 2024. According to the city’s Finance Department, the decrease in the tax rate has cost the city more than $2 billion over the last decade.

“I continue to hear the frustrations from residents about delayed services,” Martinez said. “I continue to remind them that the budget shortfalls our cities face is not anything new. We need to continue to inform them, make sure that we have an adequate tax revenue to sustain our city services.”

Martinez and Council Member Sallie Alcorn have been the most vocal proponents of a tax hike over the past month. On Wednesday, Council Member Mario Castillo joined them.

Castillo pointed out that the City of Houston faces more than $50 million in costs from the derecho and Hurricane Beryl.

“At the end of the day, we have to pay our bills,” he said.

Council Members Tiffany Thomas, Edward Pollard, Julian Ramirez, Willie Davis and Martha Castex-Tatum ranged from skepticism to outright opposition to a potential increase on Wednesday.

“When you’re talking about a tax bill, flood insurance, freeze insurance, your premiums have gone up, you’re literally pricing people out,” Thomas said.

Pointing to a recent 8% hike in Harris County’s tax rate, as well as rising home valuations, Thomas and other council members argued the city shouldn’t pile on with a tax increase of its own. Council Members Amy Peck and Fred Flickinger also previously spoke out against a potential increase.

Thomas and Martinez got into a heated exchange about whether there had been enough public discussion on a potential increase.

“To have an isolated conversation between 16 or 17 of us, it’s not fair, right?” Thomas said.

Martinez pointed out the Budget and Fiscal Affairs Committee already held a public hearing on a potential increase.

“This is not a new conversation,” he said. “This is not something that’s surprising folks.”

During the committee meeting in early September, the Finance Department presented a range of options. The lowest increase — 3 cents per $100 valuation — would cover the costs of the recent climate disasters as well as a $46 million budget shortfall while costing the average homeowner an extra $12 per month. Without an increase, the city would have to slash nearly $100 million in spending.

At the beginning of the City Council meeting on Wednesday, City Controller Chris Hollins said Fitch Ratings had joined S&P Global Ratings in reducing the city’s credit outlook from stable to negative. The outlook reductions mean the credit agencies are cautious about the city’s long-term ability to meet its financial obligations. The next step could be a credit downgrade, which would make it more expensive for the city to borrow money.

“Mayor and Council, Houston needs a plan to return to fiscal sustainability,” Hollins said. “Continued inaction poses real risk to our future prosperity.”

For his part, Mayor John Whitmire has signaled openness to eventually raising the tax rate — but only after slashing wasteful spending, duplication and corruption.

“If you do it for the right reason and document it, there’s life after raising taxes,” Whitmire said in September. “It can actually be portrayed and understood to be the responsible thing to do, but you got to let your constituents know that it wasn’t the first option you accepted.”

The city has until Oct. 28 to change its tax rate.