Hats off to Houston City Council Members Michael Kubosh, Chief Bradford, Dave Martin, and Brenda Stardig for calling a special council meeting. This was an extraordinary move to attempt to answer an extraordinary problem – pension liability. Stardig of course thought the Firefighters were not getting enough.
Currently, the total unfunded debt for pension and health care benefits is approximately 5.3 BILLION DOLLARS. Houston’s total debt is 17.5 (depending on the numbers used) billion dollars, including other short term and bond debt. These facts demonstrate striking similarities between Houston, Detroit, and Chicago, even if the Houston Municipal Employees Pension System claims otherwise.
Let me try and put this in perspective. If property taxes were increased by fifty percent, it would take eleven years to pay off the unfunded pension liability, assuming they remain static. A twenty-five percent increase in taxes would result in a twenty year payoff. This does not include the short term and long term bond debt obligations.
For many years, city politicians have over-promised benefits to the police, fire, and municipal unions. One obvious reason for these poor business decisions: union endorsements. Politicians use your money to make union deals for these endorsements at election time. Here is an example of how the HPOU treats any politician that doesn’t toe the line:
The protection of police, fire, and municipal unions is not limited to the city. These unions enjoy protection from state officials through both endorsements and campaign contributions. In return, the bloated benefit packages promised to union members are protected by our state leaders and cannot be changed by the City of Houston. Make no mistake, Houston elected officials are okay with this arrangement because it allows the local officials to promise outrageous benefit packages and blame shift to Austin. This scheme works until the “money” guys, bond lawyers, cut off the borrowing.
The most glaring effect of this drunk borrowing scheme can be seen on our streets – a slow and steady deterioration of city roads and other assets. No money is available to repair and maintain our streets, buildings, and other COH infrastructure because of the reckless spending on pension benefits.
There is plenty of blame to go around but the fault lies with our local leaders, both past and present. At the hearing, Brenda Stardig said that firefighters deserve increased compensation. I believe that police and fire deserve fair compensation; but, they should not be permitted to bankrupt the city. Political officials have long curried favor with the unions and we are now seeing the results.
Every week, Houston City Council spends about 100 million dollars. The handout line is long and the people seeking these handouts are aware of the problem but continue to increase their requests. It is like the city is living in a twenty million dollar mansion when they should be living in the hood.
Houstonians deserve honest answers to simple questions instead of backroom deals that further increase the city’s debt. As a primer, watch the interesting discussion led by Senator Paul Bettencourt and others concerning the pension problem in the public comment period of the meeting. You can also listen to my comments (see item three under the public discussion) – I speak at 57:30 of the public comment section. I encourage anyone who cares about the pension problem to listen to the entire special meeting.