Houston to escape latest budget hit with state funds

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2 months ago admin

Houston dodged a blow to its fiscal 2025 budget when Texas officials Wednesday freed up state funds to help pay the city’s share of costs to remove debris created by two fierce storms this year.

The situation underscored fiscal problems the nation’s fourth-largest city faces from natural disasters that could compound its growing structural budget gap, which has led to depleted reserves and , analysts at the two agencies warned ahead of an April city bond sale.

The latest five-year financial forecast for Austin, which in August adopted a $1.4 billion general fund budget, projects a deficit that grows from $13.2 million in fiscal 2025 to nearly $60 million in fiscal 2029 under the current maximum property tax rate the city council could approve in the absence of a higher rate passed by voters.

In September, Moody’s Ratings cut its Aa2 rating on about $727 million of Pflugerville’s outstanding GO debt to Aa3 and revised the outlook to stable from negative, citing “the city’s exceptionally high leverage, coupled with declining reserves.”

Available fund balance as a percentage of revenue decreased to 18.5% of revenue in fiscal 2023 due to cash-funded capital outlay, Moody’s said. “The city’s leverage is exceptionally high and growing, with a long-term liabilities ratio of more than 750% of fiscal 2023 revenue.”

There was no immediate comment from the city of about 64,500 northeast of Austin.