Houston Controller warns of mounting city deficit, mayor disagrees

HOUSTON - Houston's elected "financial watchdog" Controller Chris Hollins issued a stark warning to city leaders that municipal government is sinking deeper and deeper into the red.

Houston Comptroller issues warning regarding city deficit, mayor disagrees

What we know:

Hollins' warning comes in the wake of news Houston taxpayers are on the hook for an additional "$10 to $12 million" to compensate firefighters who just won a contract arbitration case on top of a monumental salary hike in 2024.

Hollins reported the city is now facing a $174 million budget gap, which is the largest municipal history.

The Controller added that the deficit is largely driven by extraordinarily high overtime costs for both police and fire, which the city failed to properly budget for.

What they're saying:

"This is not about pointing fingers because we can't move forward that way. It's about recognizing a pattern and being accountable to changing that pattern, because the reality is simple, we can't continue to make decisions that don't align with reality and expect anything except reality coming back around to hit us in the face," said Hollins.

Hollins says city leaders have hard choices ahead, either raise taxes or prepare to cut services.

"When the numbers don't add up, the impact doesn't just stay on sheets of paper. It shows up in people's lives. It shows up in reduced response times. It shows up in garbage not being picked up. It shows up in services not being delivered or reduced," said Hollins.

Over the past two years, Mayor John Whitmire has refused to raise taxes citing the affordability challenges faced by residents and widespread opposition to increasing rates.

Under Whitmire, the city has managed to pay its bills via savings generated by performance audits, workforce reducing retirement incentives, and a disaster assistance grant from the State.

FOX 26 asked the mayor for comment and Whitmire responded.

"I respectfully disagree. We have a solid plan to balance the budget without raising taxes. Based on the EY study, my administration is implementing efficiencies and eliminating waste, which will help reduce the shortfall. The Controller missed this week’s finance meeting, where we began outlining the administration’s approach. Last year, the Controller said we would have to raise property taxes. He was wrong then, and he is wrong now. We will balance the budget without raising taxes, and I look forward to working with him," said Whitmire.