Property Tax Increase 2019 And Bankruptcy 2022 In Houston, Watch As History Unfolds
by Gary Polland on November 21, 2017 at 11:34 AM
In a low turnout election, a small percentage of voters voted for all of the $1.495 billion City of Houston bond issues.
TCR has been quite clear about the fiscal irresponsibility of these bonds and the negative impact it will have on the City's future.
So a few predictions; the promises of no increase in taxes will prove to be another unfilled campaign promise. A review of the inability of the City to reduce unnecessary spending means that in order to pay off the bonds, the City and Mayor Turner will seek to bust the spending cap so they can then boost tax rates to pay for the new bonds.
In addition, don't forget when property tax appraisals go up so does the amount you pay in taxes, so that's a tax increase too. Some big spending politicians don't see this as a tax increase.
Now for part two of the prediction, bankruptcy by 2022-2024. Why? Because of the ongoing underfunding of pensions shows no sign of ending. In addition, the newly voted for bonds are to be paid interest-only for five years and then begin the payoff of principle on the loans over a 25 year authorization with a cost of around $80 million a year.
But the big problem here is that the deal doesn't eliminate the $5-6 billion plus in pension debt still facing Houston, and that increases at the rate of $250-500 million a year. There is no answer here except massive tax increases or a partial reduction of the pension debt via bankruptcy like Detroit.