A revenue cap is terrible public policy
Years ago, when I was running for Houston City Council for the first time, a very smart, older friend pulled me aside just after I had finished making a speech to a roomful of people. He told me that in every speech, I needed to let people know all the things the city does for them so they would grasp the importance of the election. As he rightfully explained, people take just about everything the city does for granted; they don’t often realize or stop to consider that their streets, parks, libraries, water, garbage collection, public safety, and much more are all managed and controlled by their city government.
It was some of the best advice I ever received because it was so true. Now, as Mayor Sylvester Turner plans to ask voters to remove the city’s revenue cap next fall, it’s more important than ever to remind folks what the city does for them. My personal belief is that when people really stop to think about how much their overall quality of life is impacted by decisions at City Hall, they are more willing to make sure city departments have what they need in order to operate. Obviously, pension problems have done much to harm the city budget. But if the pension plan passes, which it appears it will, and that part of the problem is addressed, it’s incumbent upon the city to make sure the other major part of the problem is addressed as well and that’s the revenue cap.
Voters passed the revenue cap in 2004, amending the City Charter to limit the growth of property tax revenue to the combined rates of inflation and population growth, or 4.5 percent, whichever is lower. Voters then altered the cap in 2006, allowing the city to raise an additional $90 million above the cap for public safety expenditures. The effects were not immediately felt but that soon changed and over recent years, the city has failed to realize more than $200 million in revenue. Conservatives love to crow about how great that is for taxpayers but the truth of the matter is that the average homeowner sees very little in savings as the result of the forced modest tax rate rollbacks, usually less than $15.00 per year. Meanwhile, the largest and wealthiest property owners in Houston make out like bandits.
The bottom line is that the revenue cap is terrible public policy and is greatly limiting what the city can do in terms of fixing streets, protecting citizens and rebuilding infrastructure. Interestingly, such a cap is not in place at any other level of government. If conservatives think it’s such a great idea, why doesn’t our Republicancontrolled Harris County Commissioners Court impose such a cap upon itself ? The same for state government? The answer is rather obvious: It’s not a good idea, and one need look no further than Houston to see that clearly.
Houston has made so many gains in recent years but to continue in that positive direction will cost money. My hope is that citizens will give city government a lot of thought over the next few months and really consider what kind of city they want in the future. Do we want a safe, modern city with excellent city services, solid streets and adequate drainage? Or do we want one where people are fearful to live and that’s coming apart at the seams because we don’t have enough police officers and won’t address infrastructure challenges? That may sound like a loaded, hyperbolic question but it really isn’t.
If we continue to strangle revenue, corners are going to have to be cut, and the corners in this instance are some of the things many of us care about the most. At least, I hope so. It’s time to say goodbye to the revenue cap.