KTRH-740’s Brent Fuller reported on Thursday that the City of Houston may have to offer a larger tax-rate cut than Mayor White had planned:
A 2004 voter-approved referendum, known as the “tax cap” or “Proposition 1”, required the city to budget its yearly property tax revenue at or below the combined rate of population and inflation growth or 4.5 percent, whichever is lower. The idea is to prevent city administrations from overestimating the money they’ll get, which can often leave them scrambling to make cut backs later in the year.
However, Houston’s population growth in the past year, mostly due to the influx of Hurricane Katrina evacuees, has not been reflected in the most recent figures from the U.S. Census Bureau. So the city’s tax revenue has risen much faster than the reported growth in inflation and population, triggering a legally mandated property tax cut.
Mayor White, who likes to portray himself as a fiscal conservative, already has a backup plan in place to protect his spending priorities:
White has also put forth a new proposition on this November’s ballot, known as “Proposition H,” which would allow Houston to take in $90 million more than the cap allows for public safety emergencies.
That’s a pretty clever way of getting voter approval for significantly higher spending than voters approved via the two spending caps. Mayor White’s resourceful that way.
