I have to admit, I have no idea what this may mean.
Mayor Sylvester Turner
A state district judge on Wednesday struck down a key portion of Houston’s landmark pension reform package that applies to firefighters, a move that likely would upend the system — and the city’s finances — if upheld.
In an order siding with the Houston Firefighters’ Relief and Retirement Fund, state District Judge Beau Miller wrote that the legislation passed in 2017 to overhaul the city’s troubled pension system prevents the firefighters’ pension board from determining “sound actuarial assumptions.”
Pension fund officials argued in court filings that the plan’s 7 percent assumed rate of return on investment strips them of their ability to control the fund’s cost projections. By codifying the rate in state law, they argued, city officials gained a role in that process when the Texas Constitution says only the pension fund should be able to set the assumed rate of return.
The argument mirrors one used in a prior legal challenge that was struck down in June 2019 by Texas’ 14th Court of Appeals. Pension fund officials refiled the new lawsuit the following month, tweaking their argument but still challenging the constitutionality of the pension reform package.
It is unclear what the financial hit to the city would be if the portion of the law governing firefighter pensions is thrown out, but it could be significant. In the first fiscal year after the reforms took effect, the city paid $83 million into the fire pension fund, down from $93 million the year before.
At the time, the fire pension fund argued the city should have paid $148 million, an additional $65 million, equivalent to the current annual budget of the city parks department.
Mayor Sylvester Turner, a key architect of the reform plan, said the city would appeal the ruling. He predicted the lawsuit would fail, but warned that an unsuccessful appeal would lead to “the destruction of pension reform with devastating financial impacts for taxpayers, city employees, and the city.”
The mayor said in a statement that pension board officials had convinced Miller “the board’s powers exceed that of the State of Texas and that the firefighters are above any law and cannot be governed by anyone else, even the Texas Legislature.”
Miller stipulated his ruling would take effect Nov. 15 and ordered the city to “allocate funding in accordance with” the part of the Texas Constitution challenged by the pension fund, though he did not elaborate. He also issued a permanent injunction prohibiting city officials from “taking action under SB 2190.”
I’ll be honest, I did not realize there was still active litigation over this. I don’t have anything to add at this time, but I will keep an eye out on the appeal. My guess is the city will try to get this ruling stayed, so we’ll see what happens with that.
More rent seeking behavior from the firefighters, who can’t seem to understand that it’s ridiculous to think their pension fund should get to tell the City what the contribution should be and expect the City to just roll over.
Forcing the FF pension fund to pay the city’s liability, challenging the FF’s ability to the collective bargaining process, and don’t want to value public safety equally, I don’t know why ANYONE in the mayor’s office can say they support these 2011 payscale rent seekers.
I’m just glad you show your true colors, Ross, good for you!