Houston City Council passes FY2027 $7B budget proposal

HOUSTON - Houston City Council overwhelmingly approved Mayor John Whitmire’s controversial FY2027 budget proposal Wednesday in a 15-to-1 vote, cementing a fiscal plan that introduces new municipal fees despite sharp pushback over city spending habits.

Last month, Houston Mayor John Whitmire said the fees would avoid an "unaffordable" property tax hike.

Houston FY2027 budget

What we know:

The passing budget establishes a new $5 monthly administrative fee for garbage services by shifting solid waste into a public works utility model, and implements a right-of-way rental fee for utilities expected to generate $100 million annually.

Ahead of the vote, Mayor Whitmire acknowledged the intense debate surrounding his "reality-based" plan to fix a structurally unsound system without triggering property tax hikes.

"There is no perfect budget, but we’ll build on this," Whitmire said, thanking his finance director and the city’s municipal sanitation workers.

City Controller Chris Hollins previously told us he had officially certified the budget - not because he is in agreement with it, but because he has an obligation to do so. 

But we've also heard from Houstonians and worker groups who say the budget is fair and keeps the city running without taking from city employees. 

In his new letter addressing the mayor's office, controller Chris Hollins states there are assumptions and projections in this budget, like overtime to police and firefighters, and property tax revenue, that "do not mesh with reality" and will almost certainly lead to deficit spending.

Council members opinions on the budget

While the budget passed with a supermajority, several council members paired their green lights with severe reservations. District C Council Member Joe Panzarella voted in favor but stressed his vote was not a blanket endorsement, calling the $5 monthly charge a "regressive tax." Panzarella warned that the city must fund public safety through discipline, rather than overspending on first responder overtime.

District A Council Member Amy Peck, who presented up to 19 amendments during the grueling session, voted yes but issued a stark warning. She stated she is prepared to introduce an ordinance down the road to revoke the $5 fee if it fails to deliver results.

The lone dissenting vote came from District J Council Member Edward Pollard, who leveled a blistering critique against City Hall’s fiscal habits.

"We have a spending problem in the city of Houston," Pollard said, noting that the city has faced the largest deficits in its history over the last couple of years. "What are we getting? Affordable housing? Stronger infrastructure? The answer is no." Pollard dismissed the $5 administrative charge as a "patchwork job."

Concerns also lingered over the right-of-way fees. At-Large Council Member Alijandra Salinas voiced deep reservations about pulling money from water funds, telling the administration, "I’ll take you at your word that we will not see a change in investment in wastewater and water infrastructure."

Ultimately, the majority of the council aligned with a sentiment echoed by District D Council Member Evans-Shabazz, who noted that "perfect cannot be the enemy of progress," adding that while the fiscal concerns are real, "so are the needs."

Council Member Tiffany Thomas was absent from the vote.

Immediately after the vote, protestors from the Northeast Action Collective began shouting, blowing whistles and chanting into the hallway of the council chambers. "Houston says, ‘shove it' with Whitmire's budget!"

What they're saying:

City Controller Hollins gave this statement after the budget passed:

This budget deserves an "F" for transparency and accountability. It kicks tough decisions down the road and puts political convenience over sound financial planning. It’s disappointing that Council approved a budget that repeats deficit spending, pushes the City closer to minimum reserve thresholds, and shifts more costs onto working families. Certification is not a stamp of approval. It only means the City can pay its bills for the next 12 months. This budget is not sensible, sustainable, or good for Houston’s future.  We need to protect Houston’s long-term financial health. There is no question today’s budget makes that job more difficult.

What are the new fees?

By the numbers:

The centerpieces of the budget proposal Whitmire laid out in May are two "modernization" fees designed to generate over $200 million in annual revenue.

The first would reclassify solid waste services as a municipal utility, funded in part by a $5 monthly administrative fee for homeowners.

Whitmire framed the move as a necessity for a department in crisis, revealing that only two of the city's five garbage transfer stations are currently operational. He noted that while peer cities like Pearland and Sugar Land charge residents $20 to $30 for similar services, Houston’s $5 fee is a measured starting point.

"A garbage fee is not $5," Whitmire said in May, clarifying that state law allows the creation of a utility with an administrative fee while leaving future rate adjustments to City Council.

The second major revenue stream is a Right-of-Way (ROW) rental fee. The city plans to charge public utilities and businesses—including CenterPoint, AT&T, and Comcast—for the use of public street space. The fee, structured as 5% of water and sewer utility gross revenues, is projected to bring in $100 million annually.

City Controller pushes back

Hours after Whitmire unveiled his budget proposal in May, Controller Hollins held a blistering briefing, charging that the proposal falls dangerously short of the city's fiscal reality. Hollins, who has warned of a deepening structural deficit for months, challenged the mayor’s claim that the previous year’s budget was balanced through mere efficiencies.

"By any measure this is the highest deficit in this city's history," Hollins said in May. "The Mayor said that he balanced last year's budget with efficiencies... when Stevie Wonder can see that our savings account has hundreds of millions of dollars fewer right now than it did this time last year".

Hollins was particularly critical of the Mayor’s framing of the new $5 monthly charge, which the administration has characterized as an "administrative fee" rather than a garbage tax.

"Let's be honest—this is going to cost Houstonians money," Hollins said. "The mayor stood up there bold faced that this wasn’t a garbage fee. Are you kidding me? Houstonians are not stupid."