Houston's red-light funds loss adds to grim outlook
The city's decision to turn off its red-light cameras on Monday after voters rejected the devices earlier this month will have a $10 million ripple effect that has dramatically worsened an already bleak budget picture for this year and next, city officials said.
Even before the vote, Mayor Annise Parker's administration was struggling to close a budget shortfall of nearly $70 million through a combination of budget cuts, land sales and fee increases.
Furloughs of civilian city employees could come as early as January, according to city reports, and Parker said police will be "somewhat hampered" as they try to monitor the 50 intersections where the 70 cameras were taken offline. The loss of camera revenue also will force a cut in police overtime used for other traffic initiatives, the mayor said.
"That may have an impact on our ability to do the aggressive traffic enforcement we want to do," she said.
In many ways, for the remainder of fiscal 2011, which ends in June, and the coming budget year, that is just the beginning. A draft of the fiscal 2012 budget, which begins in July, shows a projected shortfall of at least $118 million. For fiscal 2012 through fiscal 2015, the shortfall is an estimated $542 million.
"The city has a fiscal crisis on its hands and we need to go into crisis mode," said Bill King, a lawyer who frequently criticized former Mayor Bill White's management of city finances.
"We're going to have to make some really tough cuts to balance the budget. Painful, tough cuts," King said.
Several City Council members sharply criticized the administration in an acrimonious budget meeting last week in which many of the stark details were revealed, particularly the amount of time Parker spent on updating the city's historic preservation ordinance in the wake of the financial challenges.
Mayor Pro Tem Anne Clutterbuck, who chairs council's Budget and Fiscal Affairs Committee, said council members are prepared to make tough decisions, but they need time to weigh the various austerity measures Parker is planning.
"It is the sincere desire of council to see the administration bring something forward so we can act on it," she said.
Much of the frustration was over a $9 million increase in expenses and the fact that efforts to cut the budget through departmental consolidations or better management of the city's fleet have not yet been realized.
"The feeling is, we're going in the wrong direction," Clutterbuck said.
The city has reeled for several years as revenues from sales and property taxes have declined, even exceeding worst case scenarios.
Still, much of the shortfall that remains this year was built into Parker's budget.
To get through the end of this year, the city still must realize $10 million in management savings, $6.5 million from increasing fees such as for ambulance rides and earning $30 million from land sales, all efforts that have yet to be passed by City Council.
Assuming those plans are approved, the city still must cut $17 million from the budget. The two main options on the table include furloughs of six or 12 days for city employees from January to June or issuing up to $20 million in pension bonds.
Hard choices ahead
Options on the table for next year include raising taxes by $64 million, additional furloughs or pension bonds, a self-insured health care program or additional department cuts.
As each city department continues to cut its budget after having done so for several years, the only remaining option for many could be layoffs, as little else remains eligible to cut, city officials said.
Much as Parker did as the city's chief financial officer before she was elected mayor, City Controller Ronald Green has continued to voice skepticism about whether these initiatives will suffice.
"We've got some extremely tight times ahead," Green said.
"There will definitely be some belt-tightening. But everybody has to remember that the city provides services. ... We've got to be very careful at the end of the day how that equates to a reduction in service."
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