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.  

A new report and podcast are casting a national spotlight on one of the most important education stories in the state – the dramatic turnaround at Houston ISD under Superintendent Mike Miles. The Manhattan Institute's City Journal's 10 Blocks podcast, which features public policy conversations, recently interviewed education analyst Neetu Arnold about her report on the reforms at HISD. Arnold discusses the New Education System, which has raised teacher pay at underperforming schools, expanded instructional time, and created a more structured learning environment. These changes have already shown promising results, including improved student outcomes and fewer disciplinary actions. In January, the 2024 National Assessment of Educational Progress (NAEP) results also showed the progress the district has made. Here are a few of the highlights: Fourth-grade reading proficiency saw a 4% rise compared to flat or declining trends nationwide.  In Fourth-grade reading, Black students reversed a long-standing decline, achieving an 8-point increase in their scale scores. Economically disadvantaged students, who make up 78% of HISD’s population, outpaced growth rates in comparable districts. For fourth-graders, the proficiency rate is approaching HISD’s historic high of 24% from 2011. In middle school, the 21% proficiency rate represents the highest reading performance in the past two decades. “The 2024 NAEP results speak for themselves and continue to validate the tremendous achievement gains we saw throughout last school year. This is a testament to our students and especially the teachers and staff who work every day in the classroom, providing high-quality instruction to every student.” - Greater Houston Partnership President and CEO Steve Kean said in January. The Partnership recognizes that a strong public education system is essential to creating economic opportunity, strengthening families, and securing Houston’s long-term competitiveness. Arnold acknowledges the initial resistance to these reforms, but points to the data-driven improvements as evidence of why bold action was needed. Her podcast interview makes the case that Houston ISD’s turnaround can serve as a model for other large urban districts across the country.