Houston’s financial outlook could see major changes following the release of a new report from the City Controller’s Office outlining strategies to increase funding for city services.
The report, published Tuesday, compares Houston’s financial practices with those of other major Texas cities and proposes potential revenue enhancements.
The report follows recent warnings from the Controller’s Office about the city’s financial vulnerability to natural disasters. Houston maintains only about half the recommended savings levels, limiting its flexibility to respond to emergencies and rising costs. Frequent storms and flooding have further strained the city’s resources.
One of the report’s key findings is that Houston does not charge households for solid waste or environmental services, unlike other Texas cities. Introducing a garbage fee similar to those elsewhere in the state could generate an estimated $164 million each year. A clean community or environmental fee could add another $15 million annually.
The report also highlights Houston’s approach to municipal utility revenues. Unlike its peer cities, Houston does not transfer utility revenues to the General Fund—a practice that in other cities generates between $25 million and $500 million annually to support general operations.
Despite these differences, Houston continues to have the lowest property tax rate among major Texas cities. The report suggests that adjusting fees to match those of other cities could generate or free up at least $200 million in annual revenue without raising taxes.
Additional fees, such as transportation or road-use fees, could provide more funding for infrastructure projects, though they would not directly support the General Fund. Any new revenue could help bolster emergency reserves, enhance disaster response capabilities, and improve city services.
Implementing certain measures, particularly those involving revenue caps, may require voter approval. Austin remains the only major Texas city to exceed its cap through a public vote.