Houston's Keeper of the Coin Cautious
by: Pat Hernandez, January 22, 2009 11:01:36 pm
Parker spoke at Houston Intown Chamber's Leadership Luncheon at the Federal Reserve Bank of Dallas downtown. She says about 30-percent of the money the city spends is sales tax...40-percent is property tax. The rest comes from things like traffic tickets signs, fees...government grants.
"But when you're 30-percent dependent on sales tax, that can be a very bumpy ride. I don't know what the holiday season was like for the retailers here in Houston. The money goes to the state and then it comes back down to us. We won't get to December's numbers until right at the beginning of February, but my sense is that it was a pretty slow holiday season — and that goes directly to the city's bottom line."
Four things make Houston resilient economically than other cities: aerospace, energy...the medical center and the port of Houston. But then the international credit market hit a brick wall. Parker says it affected Houston.
"And the impact on our international oil companies on commerce through the Port of Houston, on traffic into the medical center and so on. I'll throw out a couple of gratuitous facts. One is that the Port of Houston does more business for the country of Mexico than all Mexican ports combined. Think about that. What is the single biggest destination for foreign travelers into Houston? It's the medical center."
She says the city's reserves and good credit rating are about to be tested.
"We're watching the numbers closely. At some point between now and probably March, I'm going to have to decide how much revenue is really gonna come into the city of Houston."
After her speech, I asked Parker if she was concerned about what councilmembers might want to be included in the budget.
"Not necessarily the budget. There are concerns about the fact that we've had an ongoing problem with pension underfunding, but that's not something that's gonna be resolved in one budget cycle, or two or, even three. That's a long term issue and we have to have long term plans in place. Clearly, if we have year over year sales tax revenue projection, there'll have to be budget cutbacks and, we have strong reserves in place. I'd like to see them not be tapped, but council's gonna be tempted to want to maintain services, want to maintain programs, and there'll be some hard choices"
Pat Hernandez, KUHF...Houston Public Radio News.