Houston Republic

The City of Houston will face a record $200 million budget deficit in the coming fiscal year as it contends with the two-pack punch of oil prices plummeting and business closures due to the COVID-19 outbreak.

Although businesses are scheduled to reopen this week, the government of the City of Houston faces a financial crisis.

Tax revenues have dropped drastically. Sources of income parking fees and municipal court fees are down, as are sales tax revenues, which make up at least a third of the city’s budget. Events that normally produce revenue are also shut down, which will impact the 2020-21 budget.

“That budget deficit will be anywhere between $170 [million] to $200 million in terms of the deficit that we’re trying to close,” said Mayor Sylvester Turner according to Houston Public Media. “It will be the worst budget deficit that the city has faced.”

According to Houston Public Media, Houston City Controller Chris Brown said the budget was already $100 million short prior to the COVID-19 crisis. However, the city will not know for sure the budget situation until tax information for March is released. 

According to law, Houston cannot operate at a budget deficit. Because of this, many city services will be cut in order to make up difference.

Police officers and firefighters are exempt from this.

“[I] hate to say this, but people that work in City Hall, in our office [will be furloughed],” Mayor Pro-Tem Martin told the Houston Public Media. “People that work in libraries. People that work in parks. People that work in the animal shelter. You know, those are the unfortunate sides of things. We’re going to have to cut city services. There’s no ifs, ands, or buts about that.”

The assistance from the CARES Act cannot be used for lost revenue and is specifically for coronavirus expenses.