Houston mayor unveils FY2027 budget proposal with new municipal fees

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.