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Pension progress report

Our favorite subject, back in the news.

Mayor Sylvester Turner

Mayor Sylvester Turner

Mayor Sylvester Turner and the leaders of the city’s three pension boards made clear to a visiting group of state lawmakers on Monday that they agree a fix to the city’s growing pension burden must be found, perhaps by the mayor’s deadline of year’s end.

The state House committee on pensions set up camp at City Hall Monday to hear testimony from the mayor, his rival in last fall’s mayoral contest, Bill King, city workers and various pension experts about the challenges presented by Houston’s retiree benefits.

[…]

The chairs of the municipal (Sherry Mose), police (Terry Bratton) and fire (Todd Clark) pension boards all stressed their commitments to continuing to work with Turner in the coming months.
Even Clark, who rarely missed an opportunity to accuse former mayor Annise Parker of “attacking firefighters,” struck a conciliatory tone.

“We will continue the dialogue going forward, and we do believe by the end of the year we will have an agreement,” Clark said. “We agree that the city should be healthy and we’re willing to do our part.”

Granted, the pensions’ leaders pushed back a bit. Municipal and police leaders stressed that the city must be forced to meet its obligations, since the city’s failure to make its full payments has helped create those plans’ poor funding levels.

Both also stressed that they already have sacrificed by cutting benefits for new hires, with Mose saying, “Reform plus time equals success.” Bratton, for his part, pointedly noted that firefighters have not been similarly accommodating. Clark declined comment on that.

Clark, for his part, noted that firefighter retirement costs amount to only a few percentage points of the $2.3 billion general fund budget.

In general, however, it was clear the pension boards planned, at least publicly, to embrace “change” at the hearing.

“We see this as an opportunity. We really don’t want to come back in 2019,” Bratton said. “Our members have worried too long about the most important benefit they have and it’s time to allow them peace of mind in knowing that their benefits are secure and the plan is sustainable.”

There are plenty of people of varying degrees of trustworthiness out there who are happy to get into the gory details of this and tell us all just how DOOMED, DOOMED we are, so I’ll leave that to them. What I know is that politically speaking, Mayor Turner has staked an awful lot on his ability to get the pension funds to agree to some fundamental changes to help ease Houston’s short-term fiscal problems while ensuring the long-term future of these funds that will then be ratified by the Legislature. This is obviously a very narrow and perilous path to walk, though just getting everyone to the table to talk was a big achievement. I don’t want to say that Mayor Turner’s term in office will be judged a success or failure depending on the outcome of all this, but I think it’s fair to say that a significant part of his grade is riding on it. We’ll see what we get later this year.

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3 Comments

  1. Bill Daniels says:

    If Turner can actually fix the pension fiasco, he will be remembered as one of the great mayors of Houston. I hope he can actually live up to that campaign promise.

  2. There is no pension crisis.

    Maybe a few tweeks need to be made.

    I’d love to see what the ideas of the other 3 lawyers on city council.
    Oh wait.
    They didn’t put together any ideas or compare Texas municipal pensions.

    Houston firefighters are underpaid state-wide and nationally, both in salary and pension.

    The real problem is the Texas legislature morons won’t solve property tax loopholes for commercial business, expand medicaid or tie certain taxes to inflation.

    The revenue cap has to be repealed. No other Texas or US city has one.

    This really isn’t rocket science.

    How dumb can City of Houston voters be?

  3. Steve Houston says:

    The only fiasco in this regard is that the city under paid for so many years, including after it received tremendous concessions from two of the employee groups while the other merely accepted lower pay to maintain their higher benefits. Having informally discussed the topic with various people, I am convinced that one of the pension groups has largely agreed to some additional modest cuts and another has accepted several proposals while the third insists on any deal regarding compensation be looked at globally, their direct pay while active significantly below market rates.

    Given the time horizon of pensions lasting 30+ years, relatively small changes yield significant results but I would caution all those involved in the negotiations to make one change a given; that the ARC is how much the city must contribute every year. That way, there won’t be the need to have these discussions every time a crook like Bill White sets up a plan designed to fail, his 2004 deal with the police system and subsequent arrangement with the municipal system never serious attempts at reform given they began with yearly funding of under half what was needed. By doing that, he insured the systems would never catch up by the yearly increases, all while he cut the tax rate to look good in his eventual run for governor.

    And frankly, while I amazingly agree with Joe that there is no actual crisis at this point, there is no need for “new ideas” so much as simply having the city funding what is owed each year, the tweaks needed from this point forth including a couple of long proposed modifications such as changing the DROP formula for those under the various “old” plans, not including yearly COLAS until after an employee has left service, and perhaps increasing employee contribution rates a few percentage points each. The cost for new plan municipal employees is already lower than what Mayor Turner needs, the new police plan members not that far behind, and the fireman start off on such a lower basis that they are not the deal busters some ignorant types claim.

  4. Steve Houston says:

    The only fiasco in this regard is that the city under paid for so many years, including after it received tremendous concessions from two of the employee groups while the other merely accepted lower pay to maintain their higher benefits. Having informally discussed the topic with various people, I am convinced that one of the pension groups has largely agreed to some additional modest cuts and another has accepted several proposals while the third insists on any deal regarding compensation be looked at globally, their direct pay while active significantly below market rates.

    Given the time horizon of pensions lasting 30+ years, relatively small changes yield significant results but I would caution all those involved in the negotiations to make one change a given; that the ARC is how much the city must contribute every year. That way, there won’t be the need to have these discussions every time a crook like Bill White sets up a plan designed to fail, his 2004 deal with the police system and subsequent arrangement with the municipal system never serious attempts at reform given they began with yearly funding of under half what was needed. By doing that, he insured the systems would never catch up by the yearly increases, all while he cut the tax rate to look good in his eventual run for governor.

    And frankly, while I amazingly agree with Joe that there is no actual crisis at this point, there is no need for “new ideas” so much as simply having the city funding what is owed each year, the tweaks needed from this point forth including a couple of long proposed modifications such as changing the DROP formula for those under the various “old” plans, not including yearly COLAS until after an employee has left service, and perhaps increasing employee contribution rates a few percentage points each. The cost for new plan municipal employees is already lower than what Mayor Turner needs, the new police plan members not that far behind, and the fireman start off on such a lower basis that they are not the deal busters some ignorant types claim.