I wanted to say thank you to Senator Joan Huffman. It is rare elected officials look out for the taxpayers.
Senator Huffman, in an act of open defiance, inserted a provision into her pension reform bill that would require a vote on Mayor Turner’s billion dollar Pension Obligation Bonds (POBs). It must be a good amendment for taxpayers because Turner swiftly denounced the amendment as a poison pill. Turner’s demagoguery was quick and telling, omitting the fact that he carried the original enabling legislation, which created the mess. Did I mention all three Houston Public employee unions endorsed Turner?
Why is Mayor Turner so against a vote? Because he knows that this bond will be defeated at the polls. This one billion dollar bond does not buy one road improvement, hire one more police officer or firefighter, or build one park. All the money goes directly to city employees and their very lucrative Deferred Retirement Option Plan (DROP). This plan, originally supported by Turner when he was a state representative, has caused the unfunded liability totaling 8 to 10 billion dollars. Senator Huffman has the right idea because I fear we have another Dallas on our hands.
All investments need to be carefully scrutinized and the amount and size of every DROP account needs to be disclosed. The Enron-style accounting, lack of transparency, fraud, and misrepresentations associated with the pensions have been staggering.
Thank you Joan Huffman for looking out for the taxpayer!
I would have more confidence if the same people would be consistent about caring about tax payers voting. I would love to see her push for term limits for all state, and county elected officials.
I would feel much more confident that they were sincere if they were doing away with their pensions, and those of DPS and teachers.
I keep hearing that Houston needs to go into bankruptcy so that way they would not pay the employees their EARNED pensions. Why not push to get rid of everyone’s pensions, and just straight 401s so that the hedge fund mangers can make more millions?
This is typical of the Russian loving Republicans to always go after something that they don’t like so that people won’t see the corruption that they are into.
No way indicating that anyone individual is doing so, but I get my information from the same place that Trump gets his information, such as, thousands of Muslims celebrated 9/11 in New Jersey.
Neither Here Nor There,
Politicians promised these pensions after large payoffs from the unions themselves. I am sure the intent was to make millionaires out of public employees when this was done. The taxpayers never agreed to any of this. The unions need to understand politicians lie. They lie to enrich themselves along with the unions. We live in a City, not a pension obligation. Personally, I believe this is financial fraud and people should be in prison over it.
Bob Lanier was the mastermind behind that, Lee P. Brown added the municipal employees. Lanier not here to defend himself, but I doubt it that he did it to make millionaires of police and fire.
Unions, what can police, fire, and municipal unions do, strike? Of course not, of course it is very typical of the Trump type promoters to make allegations that sound good but they cannot prove.
Can you prove that the intent was to make police and fire millionaires? One brother that retired from HPD (40 years of service) is not a millionaire, so I have no idea where you are getting your data.
It is par for Republicans to keep attacking Democrats even when there is no reason to do so.
Why are Republicans not concerned with the Russian involvement in the Presidential Election?
We are talking maybe 10,000 city employees that maybe are in the DROP program, tell me what percentages will be millionaires? New employees since Bill White do not have the same benefits as previous employees.
It is an issue because the City chose to not pay its share into the pension fund, the interest rates were a little high but have often been met. Thanks to Obama the stock market went from about 6,000 to 18,000 in an eight year period. If Trump can take credit for the stock market then Obama deserves credit for his years.
If Ms. Huffman really cared about defined pensions, she would refuse to accept any pension from the state that she may be entitled to and start working to make sure that all persons receiving state checks can only get 401 retirement type pensions.
Let me repeat all should be only on 401 type pensions if it so great.
Bob Lanier left office after being term limited at the end of 1997. Lee Brown assumed mayor on Jan 2, 1998. The pension issue blew the first year it was initiated in 2001 as reflected in numerous documents that showed the typical 10{997ab4c1e65fa660c64e6dfea23d436a73c89d6254ad3ae72f887cf583448986} of municipal employee salary contribution ballooned to over 30{997ab4c1e65fa660c64e6dfea23d436a73c89d6254ad3ae72f887cf583448986} in 2004 and then to 53{997ab4c1e65fa660c64e6dfea23d436a73c89d6254ad3ae72f887cf583448986} by 2005. The increase was never once funded. Lee Brown left office after being term limited out at the end of 2003.
There is no appreciable rise in the costs of any of the pensions from the days of Oscar Holcomb’s first term until 2002. Facts are stubborn bub.
Neither here nor there,
This is my source for data http://www.zerohedge.com/news/2016-12-31/criminal-witch-hunt-dallas-pension-fiasco
http://www.zerohedge.com/news/2017-01-06/city-dallas-looks-clawback-ill-gotten-pension-gains-dallas-police
http://www.dallasnews.com/news/dallas-city-hall/2016/04/06/fbi-raids-offices-of-investment-firm-tied-to-dallas-police-and-fire-pension-system
http://www.dallasobserver.com/news/by-any-other-name-pension-fund-claw-back-is-still-a-default-8977751
And while we’re on the subject, I think I am going to throw up right on my iPad if I read one more reference in The Dallas Morning News to “DROP fund millionaires.” They keep saying it over and over again: “Hundreds of officers and firefighters became millionaires from the accruals.” “Some police and firefighters became millionaires from DROP.” “DROP made hundreds of retired officers and firefighters millionaires.”
http://www.click2houston.com/news/texas/city-of-houston-sues-firefighter-pension-system_20151124023432372
If you take the time to click on the links and read the back up material we can have a better conversation. I will add if you go back and read all my stories concerning the firefighter with 4.1 million in his DROP account you will see all of my information is sourced. Lawsuits are great and discovery is a wonderful thing, sometimes.
Let me go by them one by one, There is not much data but they use averages, which can be used for or against something. For instance the average is 1.3 million for firefighters according to the article. What is an average let us say that 10 firefighter retire, 8 of them have 500,000 one a former chief has 3.5 million (most likely to be contributing the most). The other a former assistant chief has 2.5 million, the average would be one million. The average patrolmen would not be as high because the highest monthly would not be the same, and there are still many more Indians then chiefs.
Average don’t mean much without more information.
2nd from last there are less than 600 accounts in Dallas with over 1 million dollars that if out of thousands of employees, the highest paid will have the largest accounts.I am reading the articles. It was an employees stating what most firefighters and police officers know they are not retiring as millionaire, they are doing slightly better than social security which they do not get.
3rd from last, it is about the FBI raiding pension office in Dallas, not sure what Dallas has to do with Houston. But if memory served me correct there have been improper investing in Dallas, that has not occurred in Houston to my knowledge.
4th from last or the first article above – In fact that article shows that DALLAS pension may have made shady investments again that did not occur in Houston.
I don’t know why you would assume that I don’t do research or just defend for the heck of it. But let us look at averages.
The average city employee makes about $55,000, averages don’t mean much but since you seem to like them we will use them. That employee depending on his years and times of service could get and average of about 30,000 a year, must be a combined age and service of 75, If he could qualify for DROP, most new employees have not been able to do so since Bill White.
The way the DROP works is if they retire with the combined age and service of 75. Police and fire is different, it used to be 20 years of service regardless of age. If one chose DROP the pension amount would be deposited into a DROP account. The employee would continue working for the city but his pension amount is set as to when he chose DROP. So if he made $60,000 when he or she retired that is where the percentage of pension amount is determined. DROP does accumulate because the pension goes into the account, For instance if the retiree would get 25,000 a year in pension that is added to the DROP, so if they continue working for another 30 years without interest that would be $750,000.
The reason Bob Lanier created the DROP is because they were losing many police officers who were retiring after 20 years and going to the County, the DA, the federal government and working toward another pension.
That is no longer the case with new employees, it fact that is why HPD has trouble recruiting they are not paying as much as other cities. Want the best you have to pay for them, Want people not likely to engage in crime you have to pay for it. Average HPD pay is $55,000. The average city of Austin police pay is $78,000. The average Dallas police officer pay is about $55,000 a year.
Houston and Dallas gave up pay raises in the past for good retirement pensions. That was the promise made to them.
So Don if you take your time and keep an open mind you will find that to punish police and fire for honoring their contracts is un-American.
Term limits do exist for all state and county officials. It’s called voting. When voters want to limit the term of an elected official, they vote the person out of office. In some liberal bastions like the city limits of Houston, the voters decided to take the lazy way out and provide a formal limit of terms. This is mostly to limit the damage mayors and councilmen could accomplish as they were caught stealing, lining their own pockets, misrepresenting sanctuary policies, and promoting diversity over common business sense. Maybe the only wall we need is one surrounding the city of Houston to limit the spread of its corruption.
Don, from what I’m told, former mayors Lee Brown and Bill White should be among those first in line to be criminally charged. I believe that until fiscal order is restored to city finances, all further accrual of deferred pension monies should be put on hold and those funds still in pension systems should garner no interest as a condition for changing Houston’s pension statutes.
Lee Brown, Bill White and Anise Parker from the city along with John Whitmire, Sylvester Turner from the state (and Mario Gallegos were he alive) are the architects, protectors and defenders of this ponzi scheme pension mess we are in. All of them should be run through a RICO investigation and if appropriate prosecuted. Yoohoo Ken Paxton because Kim Ogg won’t touch it.
Thank you Joan Huffman If the citizens vote to approve these bonds we will know for sure the city is done. To David Jennings, thanks for the promotion of actual reporting you and your contributors bring to this city. Between this site, Blog Houston and the Houston Business Journal we at least have some information getting out.
DanMan who was Governor, Lt. Governor during the tenure of those individuals when they were doing all that harm? Oh, they were Republicans, let us not forget that they are not only as bad as those liberal leftists they are actually worse.
What happened to local control that was being pushed by the Republicans just a year ago? Oh they thought that Bill King was going to win.
Why misdirect? Name the repub that advocated for this, had the power to enact it, changed the rules of the funding for it from the very beginning, protected the under funding all these years and then filed the bills to cover for it in the Texas legislature. When you find that person include them in the lawsuit.
Local control was removed by legislation filed by Turner, Whitmire and Gallegos I believe. IIRC some of it was unprotected by a vote by Texans across the state pending local voting.
A very liberal repub Speaker of the House named Joe Straus from San Antonio that this blog host endorses and his committee chair for pensions named Dan Flynn protects the status quo but that is at no cost to them. A local repub legislator named Jim Murphy tried to file a bill to return local control to us in the previous session and was stifled by Straus and Flynn.
What does Bill King have to do with anything other than try to straighten out the mess?
When it comes to making a contribution to a discussion I can find nothing here in your comment, so there.
Okay Republican local control,
http://texascitizenscoalition.org/uncategorized/representative-murphy-files-hb-2608-returns-municipal-pensions-to-local-control/
Murphy one of many Republicans.
Like most Russian loving Republicans, like the unnamed one at the White House, resorting to alternative facts tends to be a way of doing things.
Why oh why does the state have control of the pensions?
In most states, municipal pensions are handled by local officials through a collective bargaining process. But in Texas, the Legislature seized control of the biggest local funds in 1989 and started dictating pension terms to local governments. Source
http://watchdog.org/239667/houston-union-pension/
Dan the Republicans are too corrupt, they believe in local control when they are the “local”.
Manuel,
I say there are hundreds if not thousands of officers with over a million dollars in their DROP accounts. Let’s just agree to cut it to 500,000 and go home. If what you say is true there should be no problem. Also, let’s look at all the DROP accounts and more importantly let’s look and see what the private equity investments look like and who is getting paid to manage those investments, remember Dallas and the FBI raid. You must admit it is a weird argument that police don’t what to go to defined contribution but yet want a billion dollars to invest? I thought they didn’t like investments? I say they know there is not enough money to cover the DROP accounts because of the private equity losses. Turner knows this too because he admitted it was a poison pill. The billion is really all they want so they can cash out. If no one has that kind of money in their accounts it should really be no problem. And, another thing is we claw back every dime with personal guarantees if the billion dollars does not cover it. Then we take all the pensions from the elected officials first as a condition to the billion. Remember you said no one had a million dollars. I do not see a problem do you?
Don that is in Dallas, they invested in Real Estate, that has not occurred here in Houston. There are pension problems but most have occurred because the last three mayors did not put the money into the account as they should have.
Like someone sending in $500 monthly payment when $2,000 is due on a mortgage. The bank will soon demand all of the money that is due.
But people now want to defend the person who did not pay the mortgage (The City) and make the bank take the loses.
There is something very un-American about that. I would say that the old Republican Party of Reagan would agree with me.
But let us consider Social Security, the highest amount one can receive is about $3500 a month. If they retire at 65 and live till 90 they will receive over $1,000,000. Social Security also has a cola, this year it will be .3{997ab4c1e65fa660c64e6dfea23d436a73c89d6254ad3ae72f887cf583448986}, I did not factor that in.
The problems with the pension started with Lee P. Brown, he over estimated what the City was going to receive in revenue, so he quit taking the Metro money, gave the City Employees a nice pay raise, and added Municipal Employees who wanted to opt in to the DROP/Pension a chance to do so. Those employees had to pay into the the plan and if they were not already in that particular plan they had to buy back years.
Lee P. Brown was counting on fees for pipes and whatever underneath the ground, the companies that would pay the fees fought it in court and won. Thus the City started to bleed red and all the council members and all the mayors could not (would not) put it together again. They would rather have projects today than to take care of the debt. The worse was Annise Parker, my opinion. But she had Republican support, Republican preferred her over Peter Brown or George Greanias.
All I am saying it is let us see if the City can fix its problems, the bankruptcy is always available.
Is this about defined benefit vs. defined contribution? The city shouldn’t be burdened by the guarantee of amounts to be paid out regardless of ability to pay. The taxpayers shouldn’t be obligated to fund the city if the city becomes a millstone about their necks. Change the set up to defined contribution and it works.
As far as the Russian loving stuff. Yeah, I dig Tolstoy. Are you some backwards looking c*9! who doesn’t appreciate good literature?
Keep in mind that a portion of the pensions is a Social Security replacement. That part needs to be maintained as is, or put everyone on SS and let the Feds worry about funding that part. It’s the only part of the City pension that should be subject to COLA. In the private world, defined benefit pensions are generally not subject to COLA, which makes the obligation much more predictable.
I would make other changes. The SS equivalent part of the pension should not be available until age 62, with a decrease for taking it that early, and use the SS rules for full value age. The remainder should be available at age 60 for full pension, but reduced 5{997ab4c1e65fa660c64e6dfea23d436a73c89d6254ad3ae72f887cf583448986} per year if taken earlier. Eliminate DROP. If kept, the employee gets a check, not a lump sum that earns interest.
agree with Ross
Amazing how many people don’t know the history of the DROP program and why it was started.
Ross Police and Fire, City, do not pay social security.
Ted, I guess the way to avoid the Bear in the room is to make jokes. The Republican Party is up to its eyeballs involved with Russia.
The same sources that reported that thousands of Muslims were celebrating in New Jersey, has come out and stated that Trump and many of the Republican supporters are receiving as much as 100 million dollars a year from Russia.
Ms. Parson the city chose the easy way, let us say that Republicans pushed for term limits for City elected officials, they gathered sufficient signatures to get it on the ballot. It was a Republican thing especially during the Gingrich years. Kay B. Hutchinson first ran promising to run more than 2 terms, of course typical of most Republicans she did not keep her word. There were Texas elected officials that also promised but never kept that promise, most if not all were Republicans.
I know the City employees don’t pay SS. That’s why I said we need to keep that in mind when messing with their pensions, since a portion of the pensions is designed to replace social security, and should be roughly equivalent in benefits, eligibility, and COLA. Eliminating the ability to retire on 80{997ab4c1e65fa660c64e6dfea23d436a73c89d6254ad3ae72f887cf583448986} of pay at 55, with COLA on the full pension, would go a long way towards making pensions affordable.
And, for all of the complaints that HFD employees are low paid, I have never met one who didn’t have a second or third job they worked on the copious days off they get due to their schedules.
We don’t pay them enough so they have to work two or three jobs, something wrong here.
They work two or three jobs because they work 2 24 hour shifts a week and have lots of free time. If I had that schedule I would work other jobs. A few years ago, it seemed like half the FedEx drivers I came across were HFD guys working a side job
Ross, HFD does in fact work 2 24 hour shifts most weeks, and 3 24 hours shifts in an 8 day period two times in a 72 day period.
It averages to 46.7 hours a week.
That’s also a function of what is best for the employer. Because you have minimum staffing, the more shift changed there are, the more times you’re apt to incur overtime.
If someone calls in sick, I cannot leave. Usually it might take 30-60 minutes to find relief. At other times, because of minimum staffing, I’ll be stuck there – sometimes as long as an additional 12 hours.
Neither Here Nor There
You keep talking about Trump and the Russians. What have they got to do with the pension mess?
I’m neither Republican nor Democrat, but if the Russians helped defeat the Hildebeast, God bless ’em!
I just don’t get all the animus toward public employees. They work at less-than-market wages for the promise of a defined benefit pension, That was the bargain made and should be kept. As for police and firemen, their schedules and retirement ages reflect the physical and emotional burden of their jobs. Would YOU trade your job for one that involved carrying 100 lbs of gear into a burning building and trying to find people who were in danger of burning to death? Would you trade YOUR job for one that involved rolling up on domestic disputes that could turn violent any minute? Dealing with mentally deranged or drug-addled unpredictable folks?
Public employees are your neighbors and fellow citizens; they are no more bloodsuckers or lazy incompetents than the rest of the populace. Stop worrying about how much they might or might not have in their retirement accounts; do you think anyone else is entitled to weigh in on how much is in yours?
Jeanean,
All public employee salaries are public as prescribed by state law.
** They work at less-than-market wages for the promise of a defined benefit pension, **
You might want to check that first premise.
And they watched for 15 years as their pensions weren’t funded. Honestly, the people most impacted by this mess should be the people that demanded they end up where they are by their support for the very situation they find themselves in.
Sorry, got tired of reading this and ‘Neither Here Nor There’ as an Independent who moved out of Houston because of the crap I saw I think you need to be banned from posting. Somewhere in all of your posts is a comment that is stated to try and degenerate people who do not agree with you, from my days in debate, the standard always was when watching political and other debates if you cannot win on facts start name calling so frankly anything you say or type is suspect.
A deal was made at the time where Police and Fire Officers chose pension over pay. Which if I completely buy because the $55K average you keep on throwing around is bull I know people who work in both should have been documented and submitted to the citizens of Houston for a decision. While the CBO has it’s own issues I would have liked to see it scored and reported as to the difference in overall costs to the citizens that they would have to come up with in taxes. Guess what everyone who was involved sold a bad deal to the taxpayers, in the fact that paying them then in salaries would have amounted to what was estimated to be a lot less than the kick the can down the road that was done. In addition as part of that requiring City Employees to also have to contribute more to get larger returns should have been looked at the same time.
None of this was done and the can is now here and it has grown bigger than a supertanker. It was a combination money grab by one part while the other part the elected officials knew they could do this and not have to pay the price at the polls. While Huffman and I don’t always agree, I think a vote on this is needed, heck it should have been done back in the day with financial openness but it wasn’t therefore you have the Sylvester Turner plan which still doesn’t fully address the issues and everyone talking about contracts and un-American behavior. What was and is un-American is that it wasn’t represented correctly or fully to the taxpayers at the time what the costs associated with all of the shenanigans were and I think it needs to be done this time that way. Let it go to a vote I guarantee that there will be competing financial documentation in an election of the costs and advantages/disadvantages associated with up or down and everyone can have a chance to say if they are willing to do this or require something else.
Oh and one last comment, I am not a citizen of Houston any longer and will not be participating, I just don’t want the fall out outside of Houston that may result. Some of the lack of professionalism and service that I saw in Houston had me sell my house and find somewhere that could provide that. My opinion stated here, what you should really worry about is that I can point out a huge number of my neighbors who are Police, Fire, and Houston employees who have also voted with their feet. Does that tell you anything about how they feel about what is about to happen to the tax base?
Shawn, those city employees moved to the suburbs for the same reasons many others did. They couldn’t afford decent schools for their kids and did not want to live in an urban setting. Given the value of properties in the city keep rising, apparently a lot of other people are moving back into the city so it all works out but as Hooper and friends have pointed out in the past, most cops and firemen have always lived outside the city.
Regarding pay, when Lanier started DROP for the public safety workers, the average compensation was much lower than it is today. Whatever your friends are paid now, their older peers were not paid nearly as well so their DROP accounts are meant to supplement their smaller pensions. HFD leaders went into discussions because Turner promised them a comprehensive look at total direct compensation, not just to cut their pensions in half, but that promise has evaporated and along with it, our support. If HFD were as well paid as other cities in the state, the cuts would be more understandable but avail yourself of the internet and go see what other cities are paying by comparison.
Shawn, Sorry you don’t understand the concept of average.
Let the people vote. Then, if they vote down the bonds, simply remove a proportional amount of money from public work projects & city services in those voting precincts while applying smaller cuts to those voting in favor. The only thing Turner and King agree on is that the employees are owed the money and those promises were made with the full backing of the city’s varied revenue streams. The claims how the promises were political payback or in exchange for donations don’t pass muster, after all, HFD backed Orlando Sanchez, not Brown, and continued to back GOP candidates for mayor until new leadership finally convinced members to try Turner. Even the cops backed Locke over Parker while HFD choose Morales. Plus, you could add up every penny of donations from employee groups and it wouldn’t touch the level of donations provided by developers and big business so that is a red herring.
The bond is intended to help restore some of the money owed two of the pension plans, $750 million to the cop pension and $250 million to the city plan, not the full amount owed but a portion of it in exchange for another round of concessions that amount to a bare minimum of $2.5 billion though financial experts claim it will be a great deal more. Given the additional cuts being made to HFD’s pension, they should be made whole as well but I understand how that might offend a few here since HFD is the only plan that still provides DROP benefits to new employees, something Turner intends to change in his latest round of cuts. Most workers in the other two plans do not have the benefit, the cops lost it in 2004 and the municipal employees that still have Social Security to rely on now that they are required to wait until age 62 to retire, lost it a few years later.
Given the comments, most here don’t understand that DROP money was earned and retirees can freely remove it from their pensions, any serious talk about retroactive cuts would invoke a run on the bank like Dallas saw when their huge investments in speculative real estate collapsed. Of course Dallas gave employees very high interest rates for their DROP that Houston hasn’t seen in almost 20 years but don’t let facts get in the way of trying to confuse people. For those wanting to ballpark how much money remains in the pensions tied to DROP, go to their freely available pension reports online and look up the numbers, then look at how many employees with the benefit have enough time on and divide. Given low interest rates provided, most with large DROP accounts removed it years ago, many buying annuities to supplement their 50{997ab4c1e65fa660c64e6dfea23d436a73c89d6254ad3ae72f887cf583448986} pensions with a monthly check, others using it to pay off bills or buy land in the Hill Country. So the idea that you could steal half their money is indicative of a mindset I won’t bother to address, voters had their say at the polls every two years and picked the same politicians, why shouldn’t they bear the responsibility for the actions of their choices?
The most recent development in this mess is how Turner is trying to impose double cuts on HFD. That is why HFD refused to stand on the podium that fateful September day and declare a final deal had been agreed upon. Turner tried to shove the pension deal down everyone’s throats, some of you here said as much, so final legislative language would be ready for the opening day of submissions. It’s now approaching the final day of submissions and for all the initial rush months ago, there is still no final bill. King, Bettencourt, Murphy, Huffman and others all point out that the lack of specifics makes it difficult to credibly discuss the matter, King’s willingness to blindly sign off on the whole thing on the condition the city moves to a defined contribution pension but only for new employees, making no sense at all. After all, that would not address the existing under funded liabilities he claims must be paid off, nor would it force the city to contribute its share, that being the major reason why the problem exists now, and it fails to consider how that would impact existing employees.
So let the people vote yet again but demand they live with the consequences since some of you are content to let them walk away from the consequences of their previous votes. Why is that so hard for fiscal conservatives to understand?
Peter D.,
It is much easier to have a bankruptcy court making spending decisions.
Why can’t Klein-Miller Pension Reform Act rules apply?
Dan, Kline-Miller only applies to PBGC plans. The Congressional Record makes it clear that there has never been enough support for extending protections to public sector pensions. In fact, as cities like Houston were pushed out of Social Security, at least for public safety plans, it was noted that there are no mechanisms for the plans to fall back under Social Security.
Don, true but isn’t it always easier to let someone else make your decisions for you? That doesn’t mean you’d like the results, only that it would be easier. What is curious is how so many otherwise fiscally conservative people would want to take that route, absolutely no guarantee that the bulk of cuts would come from employee salaries or pensions. Given Houston’s bonded debt and vendor debt have no provisions to claim senior status to other forms of debt, people should be careful what they ask for. Then, if the court appointed trustee decided city trash service was over and above what is provided by the county, a fee could be attached, the crime lab shut down in favor of sending evidence to DPS for free processing, street lights shut off, and a hiring freeze imposed as hundreds leave to find gainful employment elsewhere. There would be opportunities for a limited few under bankruptcy to make some money but wholesale cuts of salaries or benefits are unlikely.
Peter,
I trust a Federal Bankruptcy Judge to cut spending more than any elected official. I have often argued that with the duplication in services with the County it would just be easier to do away with the City. The City itself has turned into a pension obligation. It is not a real City. The City has not been able to pay its bills for years. The best answer is to put a bullet into it. The police and fire folks can move onto all these higher paying jurisdictions. I am hoping to drive down a road and not have to replace a tire or suspension.
Let Harry Hayes move to the county to run the trash service, we don’t want to lose him. And I agree with Don about the roads. Tires and suspensions are not cheap and with that, water, sewer and every other city service will have to be compromised to pay for the pension promises.
Peter D., the concept of the Klein-Miller Act is what I’m talking about. Those pensions that were negotiated by the unions, controlled by the unions and depleted by the unions ended up being a burden on everybody associated with them. That the unions backed the law shows a lot of moxey but they left their members with pennies on the dollar and that bi-partisan law was signed by Obama to allow it to happen. It is the exact same thing here except instead of the unions negotiating with the business leaders the three unions here negotiated with the mayors. The mayors had no skin in the game and voters to gain. All those companies that went out of business or moved out simply got priced out of the market they served.
All of us that get priced out of our properties will do the same. See Detroit and Chicago for example.
Here’s the dilemma that municipal pension holders have. The people they need to pay for their retirements don’t want to work into their 70s so city employees can retire in their 50s. Shocking I know but get a clue. The younger people with families are not going to repopulate a crumbling city with high taxes to make up the losses.
If we had somebody besides a liberal promise making strong mayor negotiating for the citizens AND pensioners those pensioners would have a chance at getting some love from the citizens. As it is those mayors never considered the citizens, obviously only cared about the votes of the pensioners and this is where we are.
I’m a native and I used to be an advocate for my city. No way I would recommend moving here to a friend of mine now. Truly a sad thing too. Houston was unique.
Don, why combine crime labs with the county, as it will charge the city for work done, when DPS is legally unable to charge you or deny services? A great many cities in the state get all their crime work done by DPS this way yet I never hear fiscal conservatives complaining about the use of tax dollars. But I am in agreement with anyone that believes combining services can be a great savings for all concerned. Keep in mind it works both ways though, Judge Emmett was calling for the city to maintain roads in the county during his state of the county speech awhile back, many of the subdivisions looking just as bad as Houston’s streets. To date, guess how many county streets have been serviced by the city. And if the city were to move into bankruptcy, what makes you think the judge or the appointed manager would put sizable amounts of money into roadwork, no matter how bad some streets are?
Dan, the PGBC was established when private companies would declare paper bankruptcies in order to avoid paying pensions. As such, it consumes tax payer dollars and is ripe for failure if another major financial downfall takes place, the 2014 amendment doing more for workers than employers. Houston now requires municipal workers to stay until they are at least 62 and that is not for a full pension, the police not getting their newer, lower amount until they reach 55 years of age. Compare that to other Texas cities or even counties where the rule of 70 is applied to allow county deputies to leave with large annuities guaranteed by tax payers, just as the interest rates are the same Turner is trying to move to. Every time the state fund doesn’t reach it’s goals, guess who pays for the additional costs, it isn’t the employees.
And when you speak of being priced out of your property, keep in mind that as prices rise, so do taxes, those willing to pay a premium have displaced a great many Houston natives despite the imagined threats of pension costs rising above some imaginary number, even the removal of the tax cap does not impact the city’s taxing limit rate, the measure addressing the amount of increase instead. Why Bettencourt doesn’t work on statewide property tax reform, other than how the current system keeps him flush with customers, is a separate question.
The reason the city’s municipal plan is so far in the hole is that one of Brown’s changes allowed municipal workers under a very weak pension to buy into a premium plan for an absurdly low cost, their pension system even financing people to make the change. That was why the expected level of changing over was estimated so low, the numbers Brown’s administration used for calculations also from before the dot.com bubble burst. But the belief that a conservative mayor would have done anything differently seems a stretch considering even King has loudly and publicly stated that all back owed pension obligations must be paid before any new employees can be placed in a different kind of plan. It should be noted that employees for the cop pension and municipal plan hired since their changes were made years ago cost a great deal less than their peers that are currently bailing out to avoid changes. If all active employees were under the newer plans, not this latest proposal even, the costs would plummet.
Thank you Peter, very well stated. People need to know the facts about the pension. Those are lives of the people that risk their lives for them (those that live in the City).
Gentlemen,
I’ll defer on the specifics of how things came to be but what does it really matter. The people that made the promises are now gone. The people in charge of the pensions that allowed them to get so far out of hand have taken their money and departed. Those that are left have limited choices.
I commend those that have recognized the need for cuts moving forward and Peter, you can relay this to your fellows at HFD, as the only group unwilling to stop churning out millionaires, you are going to have to make cuts too. Might I suggest a cost cap of 25{997ab4c1e65fa660c64e6dfea23d436a73c89d6254ad3ae72f887cf583448986} of base salary? Anything more than that is excessive. Your people tell the world how your average life expectancy is below 60, your pension investing covers 90{997ab4c1e65fa660c64e6dfea23d436a73c89d6254ad3ae72f887cf583448986} of current benefits, and how you are so poorly paid compared to others. I doubt any of that is true, your desire to work twice a week while becoming millionaires does not become an otherwise noble profession.
Since the police cut pensions, they have been able to find qualified replacements. On the news the other night, I saw they were starting a program to hire military veterans to cover anticipated losses from their second round of cuts. How difficult would it be to extend this program to cover losses of firemen that leave when cuts are made? With federal subsidies for the first year or two, those ill suited for such work can be weeded out but given the constant demands for more money, maybe this would be best for all parties. I’m sure the veterans will welcome making three times as much for working two days a week.
I wish the Governor would institute state wide reform of pensions for government employees too. Cap pensions, limit deferred benefit programs, and pull the plug on part time employees getting full time benefits. If what some of you claim is correct, the state pensions are under water so fix them as well, no more guaranteed returns unless that is what they earn, all benefits to start at an appropriate age.
Ms. Parsons, you seem genuinely concerned about this and other issues. I recognize that. However, your understanding of the matter is incorrect. Parties can disagree on how to interpret certain things, but many of your statements mostly serve to show that you don’t know the subject matter.
The former military personnel have always been a major component of public safety agencies. I doubt you’ll find any two professions with higher former military amongst its ranks than police and fire. I doubt even the defense industry had such a high percentage.
Police and fire departments governed by TLGC 143 make up the majority of sizable departments in the state. Most of said departments offer preferential hiring in the form of 3-5 extra points on the civil service exam for those with an honorary discharge on their DD214. As such, approximately 1/3 of firefighters and cops are former military.
Additionally, it’s a natural fit as police and fire are paramilitary organizations with concepts of chain of command, similar mission orientations, etc.
I also really wish you could edit posts too.
HPD has always had a recruiting problem. The FD is usually not ranked in the top 150 highest paying cities in the country.
When I was in college I sat for the Austin FD exam. Approximately 5000 applicants were there for an anticipated group of 80 jobs. Less than a year later, I did the same for Houston. There were less than 700 applicants and there were approximately 300 jobs.
This was BEFORE pension reform.