If you didn’t have to worry about practicality or implementation issues, what ideas would you have about improving the city’s long term financial health? That in a nutshell is the mission of the Long-Range Financial Management Task Force that was created last year when the budget was adopted, and they’re starting to generate those ideas. I fear they may be missing something, however.
Unconstrained by the political reality that makes some of the more audacious suggestions highly unlikely, a 16-member task force has brainstormed 229 ways to save or raise hundreds of millions of dollars for Houston city government.
The city does not even have the power to implement many of the ideas on its own. The draft list, however, may foretell debates to come if the mayor and City Council seek to act on its more politically sensitive ideas.
For example, dozens of items offer ways to reduce future pension benefits, including ending pensions altogether and borrowing money to cover the current $5 billion in future pension bills for which the city has not set aside money. The list also includes changing from traditional guaranteed pensions to 401(k)-type savings plans, reducing survivor benefits, requiring employees to contribute more and raising the retirement age.
Raising taxes likely also would meet stiff resistance. The mayor and council closed a $100 million budget gap in June without even discussing a tax increase. But two members of the task force put a property tax increase of 1 cent per $100 of assessed value on the list, which would raise an additional $13 million a year for the city. To implement a suggestion of a one-cent sales tax increase, which would raise more than $500 million a year, the city would need state authorization. To avoid political infighting on the task force, members could submit ideas anonymously with a slip of paper in a cardboard suggestion box at all meetings.
There’s a bunch of presentations on the Financial Management Task Force webpage, if you’re into that sort of thing. I will defer for now on discussing the merits or demerits of any particular idea. I will just note that the ideas all seem to fall into one of three broad categories: Sticking it to city employees, privatizing various functions (where the definition of “privatizing” also includes “handing stuff off to Harris County”), and raising taxes or fees. What’s oddly missing from this is any discussion of policies that would encourage growth within the city. I say this is odd because nearly every candidate I’ve ever interviewed for city office has touted the idea of promoting growth in Houston as something he or she wants to do, though they generally don’t have much in the way of specifics. Seems to me this task force is the perfect opportunity to blue-sky a bunch of schemes for growing the city and its tax base. I don’t know if the lack of such ideas (which admittedly may just not have been mentioned by the story) are because there aren’t enough politicians on the task force or if the recent relentless national focus on debt and deficit has stunted everyone’s imagination on this subject. I think it’s critical that we pay more attention to this, because as Peter Brown points out in a letter to the editor, while the greater Houston area had dramatic growth over the past decade, the city itself has not. This has a number of consequences, including some you might not think about, and it really deserves more attention. There’s still a lot of underutilized space in the city. I urge the Task Force to spend some time thinking about how we can change that for the better.