Houston's Revenue Cap

In 2004, The City of Houston voters passed a revenue cap on the city budget. The revenue cap applies to the property taxes and is based on the city’s population and rate of inflation. Currently, it limits Houston Property Taxes to 4.5%. Although the Property Tax Cap can possibly harm Houston’s budget in the future, it isn’t yet.

Half the cities income is based on its property taxes. The city makes $800 Million in property taxes out of a $1.7 Billion budget. The City makes $500 Million on its Sales Taxes and $190 Million on Franchise fees. The current deficit is $140 Million and is caused by generous pension policies.

The first step is not to raise taxes. We can roll back our pension policies, institute a hiring freeze, lay off workers. We should not resort to ridding the revenue cap until we have exhausted every other possibility. Then, if all else fails, repeal the revenue cap. I do believe it is possible that the current revenue cap will become too much of a hindrance to the city’s operations but I do not feel we are there yet, there is still budget cuts we can implement. Then, when all else fails, get rid of the revenue cap and raise Houston’s property taxes.