Houston Mayor Sylvester Turner dropped his request for a temporary property tax hike after Governor Greg Abbott announced the state will tap into its rainy day fund to help pay for Hurricane Harvey recovery efforts.
Multi-million Dollar Damages
Although the total amount of damage has yet to be determined, it is clear that Hurricane Harvey has become more costly than Hurricane Katrina and Super Storm Sandy combined. The cost of debris removal alone is $260 million. FEMA has agreed to cover 90% of that.
Harvey dumped more than 50 inches of rain in some parts of the city. Damage to Houston government buildings is estimated at $175 million. This exceeds the city’s $100 million flood insurance policy, leaving Houston basically without flood insurance until April 1, 2018. Buying additional insurance would cost $10 million and the city would need to spend a $15 million deductable to recover municipal damages.
Rainy Day Fund
Texas enacted its rainy day fund in 1988 with an amendment to the state constitution. It is structured to automatically set aside tax revenues in boom years to help during economic downturns.
The rainy day fund currently has over $10 billion. Governor Abbott issued a $50 million check to Houston for Harvey relief.
“Let me be clear; rebuilding Texas is going to require using the Texas rainy day fund,” Governor Abbott said at a news conference. “But one thing we all know is that it’s going to require a lot more than what is in the rainy day fund to adequately rebuild the State of Texas. Rebuilding the entire region, including Harris County and the City of Houston is going to require everybody being involved and playing a role.”