This is the fifth in a series of profiles on the top candidates running for mayor in Houston.
Bill King
A fiscal conservative concerned with shoring up the city’s finances, [Bill] King would be Houston’s first Republican mayor in more than 30 years.
To get there, he aims to overcome low name identification by consolidating support among suburban voters and the city’s conservative business class. The self-proclaimed moderate has gained the backing of top conservative groups, including the C Club and the Houston Realty Business Coalition.
Yet, King ended the mid-year fundraising period with less money in the bank than many of his top-tier competitors, leading political observers to question whether he can advance while City Councilman Stephen Costello’s campaign remains strong. Both are vying for conservative support.
“We’re facing some real challenges on this pension system, and the financial management of the city across the board is a problem,” King said. “The mayor’s job needs to be the last thing you do in your career. You need to be the arbiter, the umpire, the referee calling the balls and strikes.”
[…]
He launched a committee to explore a 2009 bid for Houston, but, ultimately, opted out.
“I knew way back then that pensions were going to bankrupt the city. Nobody was prepared to hear that,” King said. “I just thought, ‘You know what? I can’t run a campaign and not talk about what I see as being the defining issue.'”
Last year, with pension reform on his mind, King again began mulling a bid.
“The decision I was trying to make was whether I was going to run or I was going to stay out and support Costello,” King said. “There’s not a lot of daylight between us.”
As the fall of 2014 approached, the grandfather of three decided it was time, spurred by the realization that he disagrees with Costello’s plans for pension reform and infrastructure improvements.
I don’t have a whole lot to add here. As I’ve said before, I don’t find candidate biographies as interesting as I do their policy positions. Your mileage may vary on that. The bit about maybe supporting Costello instead of running is interesting and something I hadn’t heard before. I’d think that one or the other of them would have a better chance of making it to a runoff than the two of them together in the same race, but it’s not up to me who gets to run. As for the concern about King’s cash on hand, the real problem is his burn rate. I’ll be very interested to see what his 30-day report looks like.
On HERO:
“Unlike his top-tier competitors, who swiftly took sides on the law, King has attempted to strike a middle ground, initially saying he “cannot in good conscience advocate either for or against the proposition.”
Voters aren’t going to have a chance to vote “sorta kinda” for the measure, the ordinance polarized into three factions; Pro, against, and don’t care. Just about every political observer out there believes HERO will be a factor in the election whether they think it will go down in flames (no pun intended) or pass with ease so wouldn’t stand to reason that refusing to pick a side would make King a poor choice for either camp that cares about the issue?
On Pensions:
At under 6% of the current total city budget, pensions continue to be underfunded, the need to go to about 8% to properly fund them a given. Per his previous comments, his plan is to convince the legislature to allow the city to change all three plans going forward and change to a plan that is cheaper for the city which will greatly diminish the benefits for the employees. To address already incurred debt under his “a deal is a deal” stance, he would issue billions in debt to essentially pay off existing liabilities, all future service by firemen, police and other city workers would be under a 401k matching styled system.
Other than the fact that he has very little publicly stated support in the state legislature to make such changes and the city employees would fight him tooth and nail, I see where he’s coming from but doubt he’ll have much luck. Currently, the next 5+ years have high rates of bonds coming due and the interest payments are climbing, all of which puts pressure on a revenue capped city. I don’t have the figures in front of me as to how much more debt the city can get into per year as state law limits it, but combined with King’s proposal to issue enough debt to cover all sorts of infrastructure improvements, he would tie up a huge portion of future city budgets even if Council and the state allowed his programs to go forward.
I’d like to know more about the state law limiting the City’s debt.
How are the 380’s accounted for, is that considered debt?
Jules, in partial answer to the amount question:
ยง 1331.051. LIMITATION ON BONDED DEBT: MUNICIPALITY WITH
POPULATION OF 600,000 OR MORE. (a) This section applies only to a
municipality with a population of 600,000 or more.
(b) The municipality, through the issuance of bonds payable
from taxes, may incur total bonded debt in an amount not to exceed
10 percent of the total appraised value of property listed on the
most recent appraisal roll for the municipality notwithstanding
that the municipal charter limits the total dollar amount of bonded
debt to a lesser amount.
I believe the city charter further restricts use of debt as well, off the top of my head the city spending $350 million on debt service this year alone. Incur more debt and you saddle future years with more restrictive finances, every billion in new debt making Wall Street edgier and requiring a higher rate of interest with stronger payment protections.
Most city debt is tied to the enterprise funds that pay for themselves. That accounts for 10 billion. Another three and a half billion comes from general obligation debt. For a mayor to pay off all projected pension obligations without changes would take four to five billion more, maybe less depending on the numbers. As the city refuses to pay the extra 75 million needed each year to fully fund pensions on a pay-as-you-go basis without touching existing unfunded amounts, do you think a candidate is going to commit the city to pay three times that to service the debt needed to catch up? New employees are not going to accept a 401k deal with a 1:1 split or whatever is needed to pay the difference. Exactly what is the proposal floated by him?
I can’t figure out how Costello plans to add all those new cops and still fix Houston’s crumbling infrastructure. Personally, I’d rather see HPD staffing remain flat, and focus on fixing the roads. Maybe that is where King sees a problem with Costello. As for not taking a side on HERO, I don’t see that as a bad strategy. The voters are going to vote on it, and that’s that. Whatever the outcome, what will the next mayor be able to do about that result? It’s like asking the mayor his/her opinion of US foreign policy. What difference does it make? The mayor of Houston has no say in US foreign policy, and really wouldn’t be able to do much to negate whatever the voters decide about HERO. Heck, even Annise Parker, once it clear the voters said no to Bill White’s beloved red light cameras, just took her lumps and accepted the decision to take them down.
Karl, don’t forget that the TIRZ’s can issue bonds the city as a whole is responsible for covering.
Otherwise, King has not given any specifics, nor have the others. That makes it impossible to compare numbers in anything but general terms. Let’s say King decided he wanted all new employees using the state pension fund, like Harris County does. Harris county has employees contribute 6% (it used to be more) and match it 2.25 to 1 in the state system where the legislature sets the interest rate every few years. At the end, you can have a monthly check based on the total, a lump sum, or a lower monthly check if you want the checks to continue to your spouse upon death. But they ALSO get Social Security and it is my understanding that neither the state nor the feds will open their system up for city employees (SS for public safety as municipal workers are on that plan already). Given the city refuses to pay in enough now, whose to say they would pay in enough under a different plan? The same rules apply but without sanctions, there is nothing forcing the city to uphold their end so eventually, it is likely we’d be having the same discussion about unfunded liabilities.
King has not shown any widespread support in the state legislature to succeed where others failed, refuses to answer questions about specifics, and focuses most of his energy on pension reform and pothole repairs. Given most pension debt he talks about is PROJECTED debt (ie: it doesn’t actually exist at this writing), he has a lot of wiggle room in his statements without being called a liar but suggesting all of Houston’s money woes are the result of pension debt most certainly is a lie. The debt is a symptom, not the cause, of the problem.
Bill, how do any of them plan to add cops, fund pensions, and fix all the infrastructure needs? The devil is in the details and none are forthcoming.
On HERO: as a hot button topic, those who are strongly for or against it expect a candidate to take a stance. If it passes, you know there will still be legal challenges, probably the same if it fails. A lukewarm candidate is unlikely to press the issue further than he has to so a side can win at the polls only to lose to Mr. wishy washy when he caves in during legal challenges. Or if it passes, he might decide to amend the ordinance to his liking in ways that supporters may not appreciate, so no, it is not like a city mayor commenting on foreign policy in the slightest.