UPDATE June 2, 2020: Mayor Pro Tem Dave Martin announces that federal coronavirus relief funds will bridge the budget gap, allowing the city to keep 2021 cadet classes and avoid furloughing 3,000 city employees.
Few industries haven’t experienced challenges due to the coronavirus pandemic. While restaurants, hair salons, and the entertainment industry are top of mind, city and municipal budgets almost immediately took a hit too.
Lost sales tax, especially in a state where we don’t have income tax, will be a hurdle for keeping the city running smoothly and safely, all while preparing for the impending storm season.
Millions Lost in Sales Tax Revenue
Mayor Pro Tem, Dave Martin estimates the lost sales tax revenue to be in the range of $180 to $200 million. People have been staying home while bars, restaurants and stores were shuttered, spending less money. In addition, conventions and events set to be hosted here, have for the most part been canceled for the remainder of the year. The total lost tax revenue is sure to hit the cities budget in a catastrophic way.
Houston Adjusts Spending
The Houston Police Department has canceled all six of next year’s cadet classes to save money. And, while the city plans to furlough more than 3,000 employees that are not part of the fire, police, or sanitation departments, there are many essentials that cannot be cut.
- Storm season is upon us, and the city is working on disaster drills to try and simulate how to respond to a hurricane during a pandemic – a vital expense that cannot be cut.
- Domestic violence and crimes at commercial properties are up since the pandemic started – so the city can’t cut back on law enforcement.
- Important development projects such as El Dorado Boulevard widening and phase one of the Houston Spaceport can’t take hits either. Both projects feature vital drainage components that require precision to avoid potential flooding.
At Property Consulting Group, we understand the economic challenges so many are facing during the pandemic. As we all work together to navigate the current state of things, feel free to call our team at 281-880-6500 with any of your commercial property tax questions.