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LEAN BUDGET: YES. POSITIVE OUTLOOK, DEFINITELY!

Ronald C. Green, Op-Ed in the Houston Chronicle

July 4, 2010 -- Nearly all cities in the U.S.—large and small—are facing some serious financial challenges this year as they prepare for their coming fiscal year. Many cities are planning service reductions and layoffs or furloughs of their municipal employees.

Houston City Council passed the city’s Fiscal Year 2011 budget  June 23; our new FY begins July 1. It is a $4.1 billion budget that calls for a very efficient and lean municipal government-- due primarily to a decrease in available funds and increased costs in the areas of fuel and electricity, pension obligations, employee health benefits and mandated payroll increases.


Mayor Parker, myself and City Council have been meeting with the city’s departments, and we are determined to meet the challenges to our budget. The city staff share our commitment to continue bringing you quality services. There will be difficult choices to make. One of those was the rate increase in water and sewer—but this is part of our infrastructure that must be kept in good repair. While there will be reduced spending on police overtime, overall there will be an increase in officers because of two police academy classes.  City-funded leisure and recreation activities will also be affected.

I believe these steps are temporary.

I believe Houston is poised  to emerge from the world-wide economic downturn faster than any other city, although not all sectors of our economy will recover at the same speed. Here are some very positive trends:

The housing economy is picking up, especially inside the Loop. (Property tax accounts for about two-fifths of the city’s revenue.)  While many cities continue to see falling home prices, Houston’s single-family home price increased nearly 7 percent over last year. And closings are up (April 2010) 26 percent over the previous year.

The decline in sales tax is showing early signs of improvement; sales tax equals about one-fifth of the city’s revenue.

Houston and the metropolitan area that encompasses our MSA is showing some remarkable stability. Over the last decade, our population grew by 24 percent, a rate five times that of New York, Boston or San Francisco. We have attracted nearly one-quarter million new residents from other U.S. cities and towns.  While the current downturn has cost us approximately 100,000 jobs, over the past decade we have added over a quarter million jobs—twice the number of Los Angeles or Boston, nearly three times that of New York. Numerous cities have lost jobs in the decade. For three months now, there has been a small but positive employment rate increase in Houston. Our college-educated workforce has grown by 13 percent in the past decade.

So there is a lot of good news as we prepare to begin our Fiscal Year 2011 on July 1.

I’m not a foolish optimist. Here’s how others see Houston:

  • No. 1 U.S. Manufacturing City (Manufacturers’ News, May 2010)
  • Largest Population Gain – Harris County (U.S. Census, March 2010)
  • Top Moving Destination (U-Haul, April 2010)
  • Mega Market of the Year (Southern Business Development, August 2009)
  • Best City to Get Ahead (Forbes, August 2009)
  • One of the 10 “Smartest Cities” in the World  (forbes.com, 2010)
  • No. 2, Number of Fortune 500 Headquarters (Fortune Magazine, 2009)

The list goes on. With an economy this healthy, our city is already “on the rebound” and—as always in Houston—looking to the future.