Mike Morris at the Houston Chronicle continued his outstanding reporting on the City of Houston’s TIRZ system this week with three stories. One provides an overview of how TIRZs work generally. Two others document the questionable investments and the corruption and inept administration at the Midtown TIRZ. These stories are mandatory reading for anyone concerned about the effects these out-of-control entities are having on our City’s finances.
Not only is there massive waste and misallocation of resources from the worst of the TIRZs, but they also do not pay their fair share of City expenses, leaving the rest of us to shoulder their burden. For example, the City's General Fund retains only 10% of the property taxes paid on properties located in the Midtown TIRZ to pay for expenses like police, fire, parks, and the health department. The Midtown TIRZ gets to keep 90% of its taxes to spend, or more accurately waste, on its pet projects. In 2023, about $13 million was siphoned off the General Fund for the Midtown TIRZ.
To make matters worse, some TIRZs, including Midtown, are also siphoning funds away from the school and community college districts in which they are located. In 2023, Midtown received over $13 million from HISD and $2 million from Houston Community College (HCC). You may recall that HCC was one of the entities that just jacked up your property taxes.
As we previously documented in our research at the Baker Institute, the burden created by siphoning off property tax revenues falls most heavily on low and middle-income areas of the City.
Each TIRZ is a special case. Some are doing good work and need to be preserved with certain reforms and enhanced oversight. But some need to be liquidated as soon as possible. Midtown and Uptown are certainly on that list.
Sadly, however, our City Council continues to cave into the special interests that benefit from the TIRZs. The most recent mind-boggling example was Council voting to approve spending $14.5 million on a barely one-acre park expansion in the Upper Kirby area. (I will be writing more on this particularly egregious example of the abuse of the TIRZ system in the coming weeks.)
