BREAKING THE BANK

Houston earns dismal grade for financial health, new report says

Houston earned a D grade in a recent report detailing financial health.

Photo courtesy of Lexus, On the Road with Chris Shepherd

Compared to many of Texas' big cities, Houston is hardly making the grade fiscally.

That’s according to a recent report from nonpartisan, nonprofit think tank Truth in Accounting. Houston earns a D grade for its financial health in Truth in Accounting's new Financial State of the Cites 2021 report, a comprehensive analysis of the fiscal health of the top 75 most populated cities in the U.S.

Based on fiscal year 2019, and therefore reflecting a pre-pandemic economy, the report examines a variety of financial factors to determine each city’s “taxpayer burden” or “taxpayer surplus” to determine cities’ rankings and grades.

As for the grading, the report may assign a municipal government a C grade if it comes close to meeting its balanced-budget requirement, which is reflected by a small taxpayer burden. An A or B grade means governments have met their balanced-budget requirements and have a taxpayer surplus.

Meanwhile, governments receiving D (Houston) and F grades have not balanced their budgets and have significant taxpayer burdens, according to the report.

Houston had $5.65 billion available to pay $13.16 billion worth of bills. What does that mean to individuals? “Bottom line: Houston would need $11,600 from each of its taxpayers to pay all of its bills, so it has received a 'D' for its finances,” the report nots. “According to Truth in Accounting’s grading scale, any government with a Taxpayer Burden between $5,000 D and $20,000 receives a 'D.'”

Elsewhere in Texas, San Antonio is in the best financial shape out all of Texas' four biggest metros, earning a C and ranking 34 out of 75 cities. The report notes that San Antonio entered the pandemic in “mediocre fiscal health,” despite the city’s debt load of $1.5 billion and a taxpayer burden of $3,500. The report says not only is Austin, scoring a D, is not making the grade fiscally and may be even worse off post-pandemic.

Like Houston and Austin, a slew of other Texas cities earned a D grade in the report, including Dallas (ranked No. 61 out of 75 cities), Fort Worth (No. 54), and El Paso (No. 42).

Arlington (No. 16), with a taxpayer burden of only $200, received a financial grade of C, as did Corpus Christi (No. 19), which had a taxpayer burden of $1,100. The top-ranking Texas city in the report is the Dallas suburb of Plano (No. 9), which received a B grade, reflective of its $2,000 taxpayer surplus.

Despite the distressing news, the Texas metros are not alone in receiving less-than-stellar fiscal grades. In fact, most cities analyzed in the report did not have enough money to pay all their bills. Based on Truth in Accounting’s grading methodology, no cities received an A grade, 13 received a B grade, 28 received Cs, 28 received Ds, and six cities received failing grades.

income analysis

Texas families need to make this much money for one parent to stay home

Photo by CDC on Unsplash

With costs to raise a child soaring over $20,000 a year in Texas, some households might decide to have one parent work while the other stays at home to raise their child.

As the cost of raising a child balloons in major cities like Houston, many families are weighing the choice between paying for child care or having one parent stay home full-time.

A recent analysis from SmartAsset determined the minimum income one parent needs to earn to support their partner staying at home to raise one child in all 50 states. In Texas — not just Houston — that amount is just under $75,000.

The study used the MIT Living Wage Calculator to compare the annual living wages needed for a household with two working adults and one child, and a household with one working adult, a stay-at-home parent, and one child. The study also calculated how much it would cost to raise a child with two working parents based on factors such as "food, housing, childcare, healthcare, transportation, incremental income taxes and other necessities."

A Texas household with one working parent would need to earn $74,734 a year to support a stay-at-home partner and a child, the report found. If two parents worked in the household, necessitating some additional costs like childcare and transportation, it would require an additional $10,504 in annual income to raise their child.

SmartAsset said the cost to raise a child in Texas in a two-working-parent household adds up to $23,587. Raising a child in Houston, however, is somewhat more affordable. A separate SmartAsset study from June 2025 determined it costs $21,868 to raise a child in the Houston-Pasadena-The Woodlands metro.

In the report's ranking of states with the highest minimum income needed to support a family with one working adult, a stay-at-home parent, and one child, Texas ranked 32nd on the list.

In other states like Massachusetts, where raising a child can cost more than $40,000 a year, the report acknowledges ways families are working to reduce any financial burdens.

"This often includes considerations around who’s going to work in the household, and whether young children will require paid daycare services while parents are occupied," the report said. "With tradeoffs abound, many parents might seek to understand the minimum income needed to keep the family afloat while allowing the other parent to stay home to raise a young child."

The top 10 states with the lowest minimum income threshold to support a three-person family on one income are:

West Virginia – $68,099
Arkansas – $68,141
Mississippi – $70,242
Kentucky – $70,408
North Dakota – $70,949
Oklahoma – $71,718
Ohio – $72,114
South Dakota – $72,218
Alabama – $72,238
Nebraska – $72,966

texas income smartasset family