Harris County will turn this year’s three weather-related calamities to its benefit, taking advantage of the governor’s disaster declarations and state law to help erase a projected $130 million budget deficit.
Under a law passed by the Texas Legislature in 2019, the county’s property tax revenue is capped at 3.5 percent. Commissioners Court can go above that only with the approval of voters.
That cap, however, does not apply during declared disasters.
Gov. Greg Abbott issued disaster declarations for Harris County for the April flooding of the San Jacinto River, the May derecho and Hurricane Beryl in July.
The declarations, county officials said, enable Commissioners Court to increase its general property tax revenue up to 8 percent without asking for voter approval. That one-year increase is expected to generate an additional $89 million for the county.
LAST YEAR: Harris County approves $2.4 billion budget, sets slightly lower property tax rate
The county had been facing a $130 million deficit heading into fiscal year 2025, which begins Oct. 1.
In addition to the disaster declaration, county Budget Director Daniel Ramos said his office was able to close the remaining gap by adding $50 million from higher fees charged for services, using Harris Health to cover some health care costs at the Harris County jail, and identifying $21 million in spending cuts from individual departments.
No layoffs are expected and Ramos said there are no “draconian cuts” within the budget.
“We did not do across the board cuts,” Ramos said. “I want to stress that point. We have not nor while I’m sitting in the seat, will ever do across the board cuts.”
Harris County’s proposed budget of $2.6 billion is an 11 percent increase from last year. Officials largely attributed the increase to state mandates like jail outsourcing, rising health care costs and an investment in legal representation for indigent defendants.
Tuesday’s court was the first time the fiscal 2025 budget was presented to the commissioners and public. The county will hold community events to discuss the budget with constituents throughout August. It will hold a series of public hearings in early September, as well, where directors will make their case for their department spending.
The budget is expected to be adopted by the end of September.
FLOOD RATE: Harris County will ask voters to increase flood control district property tax rate in November
After Harris County gained the Democratic majority on Commissioners Court in 2018, the county shifted its philosophy around spending. Instead of focusing largely on infrastructure as it traditionally had, the new Commissioners Court vastly expanded social service programs aimed at strengthening the safety net for the unincorporated areas of the county. That expansion of services was made easier during the coronavirus pandemic when the county was awarded $1.8 billion in federal aid.
Earlier this year, however, Ramos cautioned Commissioners Court that its spending was on a “razor’s edge” and the county likely would experience a deficit for the first time in years.
County Judge Lina Hidalgo on Thursday made a motion, with support from Precinct 1 Commissioner Rodney Ellis, to ask voters to allow the county to permanently raise the tax revenue by 8 percent each year.
Hidalgo said it would help the county “be in a more sustainable position to continue with basic services, to provide law enforcement pay increases, to continue and expand their own services that were increased under the American Rescue Plan.” The motion failed 2-3.
The vote’s failure does not affect the county’s ability to take in up to 8 percent more property tax money in fiscal 2025.
The county has had to trim its tax rate each of the last five years.
Last week, Precinct 2 Commissioner Adrian Garcia and Precinct 3 Commissioner Tom Ramsey said they were hesitant to ask voters to provide additional money to the county without taking a harder look at finances and implementing a hiring freeze.
While Harris County remains in a “strong financial position,” officials said, it still will be an uphill battle for future investments throughout the next fiscal year, particularly as federal money from the American Rescue Plan begins to run out.
“I think I’ve been pretty clear about sounding the red alarm that the court is facing when it comes to spending decisions,” Ramos said to the commissioners.
Last week, the court elected to ask voters in November to increase the Flood Control District’s property tax rate to fund a “transformational” investment in drainage for years to come.
The district’s current tax rate is 3.1 cents per $100 of assessed value.
Commissioners Court is proposing a rate of 4.879 cents per $100 of assessed value. If approved by voters, that would mean an additional $60 from the owner of a $380,000 home with a 20 percent homestead exemption, county officials said.
In other business Thursday, the court voted 4-1, with Ramsey opposing, to resurrect the Uplift Harris program.
The revival of the guaranteed income program comes two months after the Texas Supreme Court blocked the earlier effort on constitutional grounds.
“Uplift Harris 2.0” will re-enroll previously selected participants with a direct debit card and stricter spending restrictions. It will take about four months to revamp the program, officials said.
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