Houston’s financial outlook revised to ‘stable’ by S&P Global Ratings, Mayor Whitmire says

HOUSTON – S&P Global Ratings has revised the City of Houston’s financial outlook from negative to stable, a move Mayor John Whitmire says reflects the city’s recent efforts to strengthen its finances.

The revised outlook comes about two years after S&P changed Houston’s outlook to negative, citing budgetary pressures related to increased debt service, salary obligations and limited revenue flexibility under the city’s property tax cap.

In a statement released Wednesday, Whitmire called the change “an indication that Houston is meeting its challenges and moving in the right direction.”

“When I took office, I promised to focus on good government, eliminate waste, fraud, and corruption, strengthen the city’s finances, and restore confidence in City Hall,” Whitmire said.

The mayor credited the recently approved fiscal year 2027 budget and his administration’s financial management for helping improve the city’s outlook.

“Today’s announcement shows that the FY 2027 budget recently approved by the City Council and the work my administration does every day are making a difference,” Whitmire said. “While we have more work ahead, this change demonstrates that the difficult decisions we have made are producing results and strengthening Houston’s financial foundation.”

S&P’s outlook revision does not change the city’s credit rating but signals the agency’s view of the city’s financial direction over the coming years. A stable outlook generally indicates the agency expects the city’s credit profile to remain steady if current financial trends continue.

Whitmire also said the revised outlook sends a positive message to residents, businesses and investors.

“A stable outlook sends a positive message to residents, businesses, and investors that Houston is serious about managing its finances and planning for the future,” he said. “Houston is a strong city, and we are getting stronger every day.”

The mayor acknowledged challenges remain but said the city will continue working to improve its long-term financial position.

What led to the change?

S&P revised Houston’s outlook to negative in July 2024 while affirming the city’s AA general obligation bond rating. At the time, the ratings agency cited concerns over expected budget shortfalls, increased debt service, salary increases tied to a legal settlement and limited ability to raise revenue because of Houston’s voter-approved revenue cap.