Mayor John Whitmire released the City of Houston’s proposed $7 billion Fiscal Year (FY) 2026 operating budget, which includes a balanced General Fund. For Houston’s business community, sound fiscal management at City Hall is more than just good governance – it’s essential to maintaining the services and infrastructure that enable our region to thrive. Perhaps most significantly, this plan reduces General Fund spending – the city’s primary tax-supported budget – by 2.4%, or $74.5 million.  “We applaud Mayor Whitmire for making hard choices to put forward a balanced budget proposal,” said Steve Kean, President and CEO of the Greater Houston Partnership. “The mayor has made good on his commitment to address waste and duplication, and the Partnership is committed to working with his administration to put the City on a sustainable path, delivering the quality services Houstonians expect.”  Explore the City’s structural deficit and potential solutions in our report, State of the City’s Finances: A Deep Dive into Houston’s Fiscal Issues Facing the City. Key savings in the budget come from a combination of:  Workforce reductions: Over 1,000 city employees took advantage of the Voluntary Municipal Employee Retirement Payment Option, resulting in over $99 million in annual savings across all funds, including $29 million for the General Fund.  Operational efficiencies: Department budget reductions reached $16 million in savings.  Strategic reforms: $19 million associated with the consolidation of departments.   These efficiencies recommended in the Ernst & Young Citywide Efficiency Study underscore the city’s commitment to fiscal responsibility moving forward. The proposed budget also addresses critical public safety needs, funding the first year of a new police contract and the second year of the firefighter contract. While also providing infrastructure investments, as the budget sets aside $184 million from property tax revenue for street and drainage projects, aligning with the recent drainage settlement agreement.  During the press conference, the mayor highlighted that while this budget is balanced through efficiency and cost-cutting, the door remains open for future revenue discussions: “It would be wrong for me to say we are not going to allow Houstonians to consider a garbage fee or other matters,” the mayor said. “My responsibility is to balance the budget and provide services. I made a commitment to address waste and duplication. [Later] we will talk to Houstonians about the type of city they want to live in.” What’s next: Over the next two weeks, department directors will present their budgets in a series of workshops providing a deeper look into the FY 26 budget through Tuesday, May 20. After these sessions, City Council will review the budget, with a final vote expected in June.  

Texas policymakers, educational leaders, and parents all have a vested interest in ensuring public schools meet high standards—and that starts with a transparent, reliable school accountability system. Recent court rulings and legislative developments are shaping how performance is measured and how school districts are held accountable across the state. On April 3, the Texas 15th Court of Appeals overturned a lower court injunction, clearing the way for the Texas Education Agency (TEA) to release its 2023 school accountability ratings. The A-F Accountability ratings system, established in 2017, is designed to help parents, communities, and lawmakers better understand school quality and student outcomes. While the 2023 ratings are now set for release on April 24, the 2024 ratings remain under legal seal pending a separate ruling. In a concurring opinion, Chief Justice Scott Brister called on the Texas Legislature to prevent future lawsuits from stalling the accountability process, suggesting that these disputes should be addressed through an internal agency process rather than judicial means.  Lawmakers are actively considering legislation to strengthen the accountability framework. Senate Bill 1962 (SB 1962), authored by Senator Paul Bettencourt, recently advanced through the Senate Education K-16 Committee. This bill would prohibit school districts from using taxpayer dollars to sue the state over accountability ratings and would enhance the TEA Commissioner’s authority to enforce performance standards. A similar proposal, House Bill 4 by Chairman Brad Buckley, is under consideration in the House. The Greater Houston Partnership testified in support of SB 1962, reinforcing our belief that a rigorous, transparent accountability system is essential for Texas’ economic competitiveness and long-term workforce readiness.  For more updates and alerts on the Texas Legislature, click here to sign up for our weekly newsletter.