James Noteware | Houston Business Journal
Houston is a wonderful place to live and work. Some of us were born here; many of us moved here, attracted by opportunity and the welcoming culture. We chose to stay because of our success – individual success and collective success.
That success has begun to win long-deserved national and international recognition. The economic and demographic growth and vitality of our region have become the envy of the country, as reflected by praise from numerous national pundits and publications.
Unfortunately, for those of us who live and work in the city of Houston, there is a growing awareness that everything is not quite right. Indeed, a careful examination of city of Houston finances reveals, astonishingly, that the city is broke. Not going broke – already broke.
Even worse, few citizens comprehend the reality of the city’s fiscal condition or the magnitude of the problem. As a result of insufficient information from municipal leaders, most Houstonians confuse the prosperity of the region with the fiscal condition of the city, even though the difference is stark.
The underlying problem is simple: The city has lived beyond its means for over a decade. The city last truly balanced its budget in 2002. Since then, it has run operating losses (under the accrual method of accounting, the excess of expenditures over revenues) every single year. The cumulative operating losses – new debt not approved by voters — now exceed $2.6 billion. Nearly every measure of the city’s fiscal health has declined significantly over this period, and the city is no longer paying all of its bills.
Houston has a second problem that is almost as surprising as the first. Despite the prosperity of the region – or the Houston Metropolitan Statistical Area – the city proper has not recovered from the recession. The city’s population growth since 2009 has lagged the region’s. Despite all the recent media accolades and celebrations of Houston as “Opportunity City,” and even the numerous construction cranes around the Galleria, downtown, and the Energy Corridor, many more people and jobs are accumulating outside the city’s limits than within.
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