Here’s the Real Reason Houston Is Going Broke
Houston is broke. They aren’t bankrupt or likely to file for bankruptcy any time soon. And, in reality, their fiscal problems are less immediately critical than some other major cities with large budget shortfalls. Yet, their mayor is correct when he said Houston is broke, that the financial approach of the city is clearly not working.
Houston’s situation is dire, but not in the way that is being reported. Their “staggering” $160 million deficit is just 5.8% of their total $2.77 billion budget. Compare this to Los Angeles with a projected $475 million shortfall this year; San Francisco with a projected $800 million shortfall over the next two years; Chicago, which is addressing a $538 million budget gap; and New York City, which is in a completely different place on the Richter scale with an estimated $7 billion to $10 billion shortfall.
In many ways, Houston is the cleanest shirt in the laundry basket, but it’s still a dirty shirt. Their budget is broken, their approach to finance an absolute disaster. Let’s take this acknowledgment by the mayor as an opportunity to understand exactly what is broken. It’s important because what is broken in Houston is the same thing that is broken with cities all across North America.
