City Controller Finds Houston Underprepared for Disasters
9/3/25 – A new study by City of Houston Controller Chris Hollins found that Houston is underprepared for disasters. FEMA ranks Harris County #1 nationally for hurricane risk. However, Houston has roughly half the disaster reserves of other cities studied and half the amount recommended by Government Finance Officers Association (GFOA) Best Practices.
The study dated 9/2/25 by the Controller’s Budget and Financial Affairs Committee was called Weathering the Storm: Houston’s Financial Preparedness for Natural Disasters.
It reviews the City’s disaster reserve funding policies and economic vulnerabilities that limit flexibility in disasters.
It also proposes strategies to make Houston more financially prepared for future disasters.
Houston Has History of Disasters
Houston has faced 25 FEMA-declared disasters since 1983 with frequency rising sharply during the last decade.
FEMA gives Houston/Harris County and Miami/Dade County the highest possible hurricane risk scores – a perfect 100. The scores reflect expected losses, social vulnerability and community resilience.
In recent years, this area exxperienced the second and tenth costliest storms in U.S. history (Harvey and Ike).
Economic Vulnerabilities
The report next looks at the causes of Houston’s economic vulnerability. They include:
- Structural budget deficits
- Property tax cap
- Sales tax volatility
- Public safety costs
- State legislative policies
After a temporary boost from the American Rescue Plan Act (ARPA) during Covid, Houston’s disaster fund will experience some of the sharpest declines in history.
A number of state and local laws, such as property tax caps, limit Houston’s revenue. Police, fire and debt consume 75% of the City’s budget, leaving little flexibility.
Disaster Reserve Funding
In 2024, the City’s disaster reserve fund peaked at a record high – $385 million above the minimum mandated by policy. However, that surplus has been drawn down to close budget gaps.
At present, Houston’s reserves lag behind peer cities and recommended best practices. The target as a percent of the total general fund in:
- Houston is 8-9%
- Dallas 19-20%
- San Antonio 15-16%
- Miami 20%
- GFOA Best Practices 16.7%+
Recommended Policy Changes
The report recommends:
- Raising the minimum fund balance to strengthen reserves
- Raising the allocation percentage to strengthen the City’s safety net
- Allocating excesses above the minimum to create a consistent funding mechanism
- Clawing back dollars not dedicated to grow reserves without raising taxes
- Separating economic and disaster uses for special funds to preserve disaster funds during economic downturns.
Posted by Bob Rehak on 9/3/25
2927 Days since Hurricane Harvey
