Understanding Policing in Houston.

How City Dollars Flow

The City of Houston (COH) pays for city programs and services out of three main funds: the General Fund, the Enterprise Fund, and Special Revenue Funds. Aside from these, there are also Internal Service Funds which support providing services like health and disability benefits to City departments. These funds are separate from the Capital Project Funds that pay for voter-approved bond projects and other major physical improvements like streets and buildings.

Each operating fund consists of different sources of revenue. For example the General Fund consists of money from property taxes, sales taxes, franchise fees, and court fines. The Enterprise Funds consist of money from airport operations, water and sewer utilities, hotel occupancy taxes, and convention and entertainment facilities. The Special Revenue Funds include more than 30 specialized funds consisting of money from various revenue sources including police seizures (asset forfeiture), ParkHouston parking meters, and construction permits.

Revenues, funds and expenditures

Of all the funds, the City has the most discretion over how General Fund dollars are spent. The General Fund dollars are used for Public Safety (the Police Department (HPD) and the Fire Department), Public Works, Parks and Recreation, libraries and other basic city services. Other funds are “restricted” and are only used for specific purposes. Various federal, state, and local laws set the rules on how these restricted funds can be spent. For example, the Airport fund is governed by federal laws, and all income from Airport operations must be used to cover aviation-related costs.

HPD expenses or appropriations are paid for through flexible General Fund dollars, restricted funds, and capital program funds. In any given fiscal year the General Fund makes up more than 95% of the HPD budget. It is important to note that the COH can no longer decrease the HPD budget unless the city budget also decreases due to state law passed in 2021, HB1900.