H
ouston's ability to raise its property tax rate by up to 8% due to natural disasters and credit downgrades remains unused, despite a proposed increase of 3.2 cents per $100 of assessed value. This would help cover costs from recent disasters like the May derecho and Hurricane Beryl, which are part of a projected $46 million budget shortfall.

    City leaders have been hesitant to raise taxes, with Mayor John Whitmire opting instead for budget cuts. The city has hired an external auditor to provide recommendations on managing its financial shortfall. Houston's tax rate has actually decreased over the past decade, from 63 cents in 2015 to 52 cents last year.

    The city's credit problems began when S&P Global revised its outlook in July, followed by a similar move from Fitch Ratings in September. These downgrades are largely attributed to a $612 million settlement with the Houston Professional Fire Fighters Association. City Comptroller Chris Hollins has urged swift action on financial reforms, warning of long-term risks if the city delays.

    Despite this call for action, no city council members have proposed a tax hike, although some are open to it. The city's finance director, Melissa Bubowski, had suggested increasing the property tax rate by 3.2 cents per $100 of assessed value to cover costs tied to recent natural disasters and budget shortfall.