On June 10, 2026, City Council adopted Houston's FY27 budget by a 15–1 vote — with no property tax increase. The lone no was Council Member Edward Pollard, who called it "fiscally irresponsible." The gap was closed through three accounting choices its own officials refused to name clearly.
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The city's $3.16 billion operating General Fund (up $385M, or 5.4%, over FY26) — which pays for police, fire, libraries, parks, and trash pickup — has run deficits for over a decade.
Count debt service and the new internal "right-of-way" fee the city charges its own utility, and total General Fund appropriations reach ~$3.43 billion (the figure in the Explorer and trend). That ~$270M gap is the tell: the deficit didn't so much vanish as the books got bigger — and the shortfall got shifted onto the utility and its ratepayers.
Entering FY27, the city faced a ~$209 million projected General Fund gap. The adopted budget closed roughly $220 million of it through three structural shifts plus spending controls — without raising taxes — leaving only a ~$25 million residual drawn from fund balance. Three moves make that possible.
Effective July 1, 2026, roughly 400,000 residential customers are charged a $5/month solid-waste "administrative fee" (~$60/year), billed on their water bills. The fee is scheduled to rise to about $25/month by ~FY32 — but raises only ~$20–25 million per year initially.
Houston is the only major Texas city without a garbage fee. The administration frames this as an "administrative fee tied to solid waste service" — a distinction that matters legally but not to your bill. A proposed low-income and senior relief carve-out was not adopted; it was referred to committee after Mayor Whitmire called it an "illegal use of public funds."
The Solid Waste Management department — a ~$100 million annual operation — was moved out of the General Fund into the Combined Utility System, the fund managing Houston's water and wastewater services. This single move cuts the projected deficit roughly in half.
The effect: the General Fund looks leaner because trash is no longer on its books. The Water and Sewer Operating Fund enters FY27 projecting $2.1 billion in revenues against $1.6 billion in expenditures — a $529 million positive variance, even after absorbing the solid waste transfer. The fund can carry the added load without raising water rates in FY27.
The third mechanism is the most circular: the city imposed a 5% right-of-way rental fee on the Combined Utility System — charging the utility for using public streets to deliver water and sewer service.
The utility pays the city about $100 million per year, which flows back into the General Fund — drawn against the utility's ~$1.5 billion fund balance. That money ultimately comes from water and sewer ratepayers. Council Member Pollard pressed the finance director on the more than $200 million drain on the utility's reserves, calling it "raiding" infrastructure money.
Taken together, the three mechanisms plus spending controls closed roughly $220 million of the gap — without any single action that can officially be called a tax increase. Fund balance was left at $273.8 million, about 10.5% above the city's minimum reserve policy.
"Gimmicks."
And did the deficit really disappear? The five-year forecast keeps the annual gap below ~$175M/year through 2031 — but FY28 alone is projected at ~$115 million, with only about $77 million of room before the city crosses its minimum reserve threshold.
Now explore the full history: Houston has run a deficit every single year since 2009. Scroll down to see how it was closed — and what it cost — every time.
The mechanism changes. The pattern doesn't. Nineteen years of how Houston balanced its books — and what it cost each time.
Filter by department, year, and mayoral administration. Compare FY27 to every year back to 2018. See what got cut to pay for what got added.