Endorsement season has officially begun.
The key referendum, Proposition A, is a solution to Houston’s potentially disastrous pension problem. A complex deal ushered through the Texas Legislature by Mayor Sylvester Turner would reduce the $8.2 billion unfunded pension burden now carried by Houston taxpayers to $5.2 billion. Union leaders representing police officers and municipal employees have agreed to sacrifice benefits worth roughly $1.8 billion. But the whole arrangement depends upon voters approving a $1 billion bond issuance, 1 of 5 city bonds on the ballot.
The pension bond wouldn’t raise taxes, nor would it increase the public debt. Houston already owes this money to its retired employees; this deal will take care of a debt that’s already on the books. The bonds will be paid off over the course of three decades. By coincidence, this happens to be a good time for the city to borrow money. This is like refinancing your mortgage when interest rates are low.
On the other hand, Turner bluntly and accurately told the Chronicle’s editorial board, if the pension obligation bonds go down, “it’s worse than the financial impact of Harvey.” Before this deal was struck, our city government was staring at the grim prospect of laying off more than 2,000 employees, about 10 percent of its workforce, a cut that would almost certainly impact police and firefighters.
[…]
Meanwhile, four other bond proposals would pay for facilities and equipment at everything from police and fire stations to city parks and libraries. At a time when our police officers are driving around in cars that are more than a decade old, we voters need to pass these capital improvement bonds.
The campaign for the bonds is underway, and I do expect them to pass. But this is a weird year, and turnout is going to be well below what we’re used to – and we ain’t used to particularly robust turnout – so anything can happen. The big task in this election for all campaigns is just making sure people know they need to go vote. If you’re reading this site, you already know that much. I say vote for the bonds as well, for all the reasons the Chron gives.
We could declare bankruptcy, shirk of all bonds and start over with higher salaries and lower taxes – and no public pensions. This is probably a better way forward. The problem you have is saying I owe $1B dollars for pensions that are not in line with market rates – city worker retirement is not in line with private sector.
In response to “Bob Jones”…
Except that a municipality has no legal authority to “declare bankruptcy”, the GOP fantasy that all debt can be dismissed with a wave of the hand is a crazy role reversal on their own attempts to keep other debtors shackled for life with acquired debt. If granted, the appointed manager could instantly erase the revenue cap, cut all interest payments for the many billions in non-pension debt, and end whatever programs needed to restore fiscal order. The resulting hundreds of millions in future borrowing costs alone would make this a last resort of a sane person, especially if it was just a sleazy attempt to further cut monies owed to employees who already gave up more than enough to set the city right.
And if you want to compare apples to apples, the only realistic comparison point for most of the city’s operating budget-public safety employees-comes from other cities. Guess which big city pays less than any of the others in terms of total compensation, that’s right, Houston. Go to any fire station and ask how much more would they be willing to give up in order for city residents to save a few bucks a year, just be prepared to run very fast…