Mayor's Office Press Release
Mayor Releases Proposed FY 2022 Budget
Balanced Budget Replenishes Budget Stabilization Fund and Provides Healthy Fund Balance Reserve
May 11, 2021 -- During a news conference Tuesday morning, Mayor Sylvester Turner announced details of his proposed FY 2022 budget. The budget prioritizes city services, includes police and fire cadet classes, and a commitment to improving neighborhoods, addressing homelessness and encampments, implementing policing reform, and increasing the response to illegal dumping.
The proposed General Fund budget of $2.58 billion reflects an increase in spending by $96.6 million or 3.9 percent from the FY2021 current budget of $2.48 billion. The increase is primarily attributable to the restoration of the prior year's funding level from COVID-19 eligible redeployment costs that were funded out of the Coronavirus Relief Fund.
Like most states and local governments across the nation, the City of Houston faces a record revenue loss due to the COVID-19 pandemic. In FY 2020, FY 2021 and a portion of FY 2022 alone, we are estimating $178 million in cumulative revenue losses.
"Sales tax is one of our hardest-hit sources with an expected $113 million cumulative loss for those fiscal years. Additionally, we are projecting $65 million in revenue losses from other sources such as Charges for Services, Parking Revenues, Mixed Beverage Tax, and others," said Mayor Turner.
The loss of revenue due to COVID-19, along with the city's existing property tax revenue cap, combine to create a $201 million budget shortfall in the General Fund – the city's largest deficit in recent history.
"Thankfully, the American Rescue Plan Act (ARPA), signed into law by President Joe Biden on March 11, 2021, will provide the City with much-needed relief," said Mayor Turner.
Based on updated information from the US Treasury received yesterday, the City of Houston is expected to receive $607.8 million in two tranches, the first half in 2021 and the second half in 2022. The city would have until December 31, 2024, to use the funds. Unlike the CRF, ARPA recognizes the economic impact due to the COVID-19 pandemic and provides flexibility to address the reduction in revenues due to the COVID-19 public health emergency. Without this flexibility, the city would be facing significant cuts across all services.
"This is the budget that I am submitting to the city council members for their approval. For the sixth consecutive year, it is a balanced budget based on the city's priorities as we move forward," said Mayor Turner.
Mayor Turner plans to announce next week details of a proposed pay raise for Houston firefighters that will be included in the budget.
"It will be a pay raise the city can afford. I have said from day one that firefighters are deserving of a pay raise that the city can afford," Mayor Turner said.