City of Houston settles 'rain tax' lawsuit, lowering budget deficit by $70 million

Houston settlement to allow $70 million reduction to city's budget deficit

A settlement of the "Rebuild Houston" litigation is expected to reduce the city's project deficit by over $100 million. FOX 26's Greg Groogan explains the settlement

HOUSTON -  Mayor John Whitmire announced a settlement Wednesday of the "Rebuild Houston" litigation which will allow a $70 million reduction in the City's projected budget deficit.

 "This will take a giant step forward in addressing our shortfall and, in future years, putting hundreds of millions of dollars into repairing our infrastructure," said Whitmire.

Houston settlement lowers city budget

 Mayor John Whitmire delivered a colossally constructive announcement - "settlement" of a potentially budget-busting legal verdict over the systematic shortchanging of the dedicated, voter-mandated street and drainage fee known as "Rebuild Houston". 

 Whitmire concedes that previous administrations had misused voter-approved street and drainage fees since their inception.

  "The money has never been placed in accounts to rebuild Houston. It was used for general operations of all of our departments," said Whitmire.

The backstory:

  Back in 2010 and again in 2018, voters mandated that a major chunk of their City property taxes be dedicated exclusively to street and drainage maintenance.

 When Houston engineers Bob Jones and Alan Watson detected that the infrastructure money was being siphoned off for other purposes, they sued and the Texas Supreme Court eventually agreed, ordering the City to fully invest in streets and drainage as voters demanded.

 "We now have on the table an agreement that essentially fixes the whole dedicated drainage and street renewal fund financing going forward and that's a huge win," said Jones.

 "With this agreement, the Mayor pledges more money, more manpower and more projects to rebuild what has been lost here in Houston," said Watson.

 The settlement allows Mayor Whitmire and the City to gradually ratchet-up funding for street repair and drainage over the next 3 years until the investment in "Rebuild Houston" reaches a half billion dollars per year.

What they're saying:

 The deficit-easing deal was celebrated by nearly every member of the Council.

 "We cannot balance the budget on the back of infrastructure. We have to fully fund this. It is one of the top issues when I am going out in my District," said Council Member Amy Peck.

 "I am so happy all of the money that is supposed to go in this fund, will be in this fund," said Council Member Sally Alcorn.