The real problem, however, will be next year. With built-in increases in personnel costs, especially pension and health insurance costs, the gap next year will likely be north of $200 million. To make matters worse, the City’s general fund reserves will have been spent down to minimal levels. So the new mayor and council are going to really have their work cut out for them next spring when they put together the FY2010-2011 budget.
Here’s an article written by Bill King. He says the city is facing a very dark financial future. He says city leaders are actually concealing the truth from the public and Houston could end up deep in the hole in 2010. What do you think? Here’s what King has written:
In this year’s budget the City originally projected an operating deficit in its general fund of $90 million dollars for the year ending June 30, 2010. However, both the Administration and the Controller have conceded that the budget was overly optimistic and now estimate that the deficit will be $130-145 million. However, revenues are coming in weaker than even these revisions suggest. Unless revenues improve or the new administration makes some immediate cuts, it appears that this year’s deficit could swell to $175 million.