Houston mayor unveils FY2027 budget proposal with new municipal fees

Houston mayor announces proposed Fiscal Year 2027 budget

Houston Mayor John Whitmire unveiled his new budget proposal. He says the aim is to fix a system he described as "structurally unsound" and without raising property taxes. FOX 26's Sherman Desselle explains what it could mean for you. 

HOUSTON - Facing a "broken financial system" and years of structural instability, Houston Mayor John Whitmire on Tuesday unveiled a FY2027 budget proposal that introduces new municipal fees for garbage and infrastructure to avoid what he called an "unaffordable" property tax hike.

The plan, presented during a City Hall press conference alongside city leaders, marks a shift from the administration’s first year of internal belt-tightening toward long-term fiscal reform.

"We’ve never addressed the broken financial system in the city of Houston," Whitmire said. "If you don’t identify your problem, you’ll never fix it."

What are the new fees?

By the numbers:

The centerpieces of the proposal 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, 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.

"We're not raising property taxes"

Big picture view:

Despite the new charges, Whitmire stood firm on his pledge to protect homeowners from rising property taxes, citing the broader economic climate.

"We’re not raising property taxes," Whitmire said. "Not an option due to the affordability issues in the country right now."

The Mayor described his first year in office as a "year of discovery" that led to a second year of aggressive efficiency. According to the administration, the city previously balanced its budget by reducing services by 2% and facilitating the exit of over 1,000 employees through retirement incentive packages.

Whitmire also addressed the city's history of purchasing used equipment and trucks for the waste department, pledging that the new $116 million in utility funding would end the cycle of reliable service being hampered by second-hand machinery.

While the Mayor acknowledged policy disagreements with the State of Texas, he emphasized a commitment to collaboration to ensure the city’s essential functions—including police, fire, and parks—remain sustainable as Houston continues to add tens of thousands of residents each year.

However, hours later, Controller Chris 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. "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 wasnt a garbage fee. Are you kidding me? Houstonians are not stupid".