The Budget and Fiscal Affairs meeting held on July 29, 2025, in Houston focused on key economic indicators, budget projections, and upcoming financial policies. The meeting began with a report on the Houston economy, highlighting that the preliminary total non-farm employment for the Houston Metropolitan Statistical Area (MSA) stood at 3.4 million as of May 2025, reflecting a slight increase of 0.1% from the previous month and a 0.5% rise compared to the same period last year. However, the unemployment rate rose to 4.2%, up from 3.9% in April.

In the energy sector, the average oil price for June was reported at $68 per barrel, marking a 9.7% increase from May's average of $62, although it represented a significant decrease compared to the same period last year. The housing market showed positive signs, with single-family home sales increasing by 12.5% compared to June 2024, while the median home price rose by 0.2% and the average price by 4.4%.

The discussion then shifted to budget projections, particularly concerning sales tax revenue, which is closely tied to economic performance. The projected sales tax revenue for fiscal year 2026 is approximately $907 million, slightly lower than the previous budgeted amount of $902 million, indicating a conservative estimate based on current trends.

The meeting also addressed the Dedicated Drainage and Street Renewal Fund (DDSRF). It was noted that the transfer to capital projects was less than anticipated due to the timing of project payments rather than a lack of funds. The Jones settlement, which will begin in fiscal year 2026, is expected to add an additional $16 million to the DDSRF.

Further discussions included the timeline for upcoming financial policies and budget amendments, with a meeting scheduled for August to address capital improvement projects and another in September for financial policy amendments. The meeting concluded with a review of the actuarial contract extension for pension analysis, which is necessary for compliance with state law and ongoing financial assessments.

Overall, the meeting provided a comprehensive overview of Houston's economic status and budgetary considerations, with plans for continued monitoring and adjustments as necessary.