Mayor Sylvester Turner
Rice University’s Kinder Institute has done the preliminary math on Mayor Sylvester Turner’s historic pension reform plan and determined the numbers appear to add up if all of the components are implemented as envisioned. The institute is one of several agencies to analyze the mayor’s proposal since it was unveiled last week.
“I welcome scrutiny of this plan by experts because it helps address the unfounded arguments being made by others who have no financial background,” said Mayor Turner. “There is no doubt this plan relies on a complex package of reforms. Without implementation of each piece, we will not achieve the anticipated results. Thankfully, the pension systems are sharing more data than ever before and are committed to continue working on information sharing so we can manage costs going forward.”
According to Kinder Institute Director Bill Fulton, the mandatory cost containment provision in the mayor’s plan, if executed properly and consistently over time, could provide a way for both sides to share in the upside and sacrifice when times are tough. Fulton said the plan outline seemed to show “shared sacrifice” on the part of both the city and its workers.
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The Kinder Institute did the initial analysis in a blog post the day of Mayor Turner’s announcement based only on information that is publicly available. Mayor Turner did not request the analysis. A more detailed analysis is expected later.
The Kinder Institute’s analysis can be found here: Kinder Institute Pension Analysis.
Here’s that URL again, and more on the pension deal itself can be found here and here. The KI piece basically says that if everything works out as planned and envisioned, then the long-term funding gap can be erased. If you’re thinking that’s a pretty big “if”, you’re right, but the bottom line remains that the plan is plausible. Some legislation will need to be passed next year – I have no idea what Plan B is if that fails to happen – and before we get to the point of writing a bill and finding a sponsor, we need buy-in from the firefighters. That’s a non-trivial amount of work to be done, but at least there is a roadmap that may be used by all the vehicles in the procession.
I know all of you say it can’t work. He is the first Mayor who has ever tried to deal with it. If he fixes it he will go down as the best Mayor in the City’s history. Just my opinion.
As long as the city takes advantage of all the “good” investment years where the three systems make double digit returns to pay down debt and not use them to increase yearly spending on other things, there is some potential for success but I still maintain that HFD is not going to give as much as some are demanding unless they get raises first. Further, if the revenue cap has to be removed to make this all work, Mayor Turner better plan to have a backup plan unless he strictly limits the removal to a specific purpose. Voters are just too wary of the bait and switch tactic used by Parker and White to swallow another one right now.
But investment returns for all three pension funds have grossed better than 7% when you use a 3, 10, or 30 year time frame, and that includes the HUGE losses of 2008/2009, HFD clocking in around 10%, HPD a little lower, and the municipal fund close to that.
Not the Onion: Michael Kubosh declined delegation trip to cuba to put together policy ideas for 4th largest city
Joe, why would going to Cuba lead to better policy decisions?
I hate to address Joe but I have to ask what are you talking about?
@Joe:
Perhaps what we should read into this is, Kubosh declines to blow taxpayer money on a political junket to Cuba. Didn’t we just criticize Miller, our Ag. Commissioner, for pretty much exactly the same thing that Kubosh did NOT do? Yeah, thought so.
I’ll reserve my judgement on the trip to see what tangible results Mayor Turner achieved before I gripe about wasted taxpayer dollars. Having said that, Houston has several agencies, including the Port Authority, that are charged with developing trade. I really don’t see what Turner and his posse going there in person achieves. I’d like to be proven wrong, though, as I’d like to see Turner succeed…..it’s good for everybody if he does.