Big Jolly Politics

politics in Harris County and Texas

Lt. Dan’s Pension Bill

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If you are a fiscal conservative, Monday May 1, 2017 will forever be known as Bloody Monday in the Texas Senate.

Never let it be said that Dan Patrick cannot move legislation. If you have a bill that makes multi-millionaires out of City of Houston employees and is promoted by the most fiscally liberal mayor in our lifetime, Lieutenant Governor Dan Patrick is your guy. All of the campaign contributions from HPOU finally paid off like a slot machine making the Service Employees International Union (SEIU) and the Houston Police Officers’ Union (HPOU) the kings of the Texas Senate. The faux conservative gig is up. Yesterday, Dan cashed in his conservative bona fides for Sylvester Turner and his big union buddies.

Lieutenant Dan was not alone in wrecking the finances of the City of Houston – he had accomplices. There is always Senator Joan Huffman who never fails to demonstrate her liberalism when it counts. Senator Huffman waived to all the Houston police officers in the gallery as she lined their deferred retirement option plan (DROP) accounts with her vote.

It is no secret that Sylvester Turner intends to lift the property tax cap in order to pay for all of this nonsense. When Turner lifts the tax cap, please send a love note to Lieutenant Dan for the pension Napalm bomb. We supposedly have a “conservative” legislature; however, Lieutenant Dan cannot make things happen on conservative issues like education and property tax reform. Lieutenant Dan should not captain a shrimp boat let alone preside over the Texas Senate.

Allen Blakemore, Lieutenant Dan’s political consultant, proudly displays on his website that he has also served as a consultant for HPOU. Finally, HPOU and SEIU’s political contributions to Dan, Joe Straus, and House Pension Committee Chair Dan Flynn have paid off like a million dollar slot machine.

The Greater Houston Partnership (GHP) and C Club joined in on Lieutenant Dan’s corruption of Houston finances. Both GHP and the C Club were somehow allowed to represent Houston taxpayers in the pension bill negotiation. This is like sending Bill Clinton to chaperone Miss USA contestants. I wonder if C Club member and Greater Houston Partnership Infrastructure Chairman Jim Dannenbaum participated in these negotiations. Or was he too busy dealing with the FBI?

Fiscally conservative Houstonians are without a voice in our Texas Legislature. As usual, Houston taxpayers are left holding the bag for the worst piece of legislation to come out of Austin in years. It is a sad day for Houston.

http://www.hpou.org/salary-calculator/ 

When a Corridor is a Cap

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    1. Senator Joan Huffman State Rep. Dan Flynn

State Representative Dan Flynn from Van, Texas ran the Houston pension bill hearing last Monday. Speaker Straus has appointed Flynn to serve as Chair of the House Pensions Committee for the past two legislative sessions. Although Flynn claims that he has “never voted for a bill to raise taxes” he does not seem to mind increasing the tax burden of Houstonians. All for his good buddy Sylvester “Sly” Turner.

Last Monday, I attended the House Pensions Committee meeting. Flynn ran the meeting like an autocracy, which is just the way Turner wanted the meeting to function. Although opponents to the Flynn/Turner bill were permitted to speak, they were not allowed to sit in the hearing room until their turn to speak. When I attempted to enter the hearing room, I was told that I would have to go to one of the overflow rooms. I quickly learned that the city lobbyists were controlling the seating and only those supporting the bill were allowed to sit in the hearing room during Mayor Turner’s presentation and those of the resource witnesses.

The large overflow crowd took up two committee rooms and a large auditorium located in the Capitol extension. The red Houston firefighter t-shirts contrasted with the HOPE t-shirts worn by the City of Houston Organization of Public Employees. Some city employees drove to Austin in city vehicles.

Flynn is carrying Houston’s pension bill, HB 43, in the House and put words into the mouths of speakers before his committee. Flynn made every speaker announce their name, state whether they are for or against the bill, and asked all the speakers to acknowledge that they were speaking on the committee substitute to HB 43. I am sure that Flynn’s directions were confusing to the numerous witnesses who were new to the legislative process.

HB 43, as substituted, is the companion bill to Senator Joan Huffman’s pension bill, SB 2190. The two bills, as substituted, are identical except for the provision in SB 2190 that requires a vote on the process. These two bills contemplate a billion dollar pension obligation bond.  Huffman’s bill 2190 requires a vote for the pension obligation bonds. It should be noted that the firefighters receive no proceeds from this bond. Turner and the police and municipal employee unions object to the voting requirement in Huffman’s bill. I believe this is because they know that Houstonians would not vote in favor of more debt. Please note that Turner does want to place a referendum on the November ballot that would allow him to lift the revenue cap.

Turner, the first witness, described how the world would end without the approval of HB 43. The truth is if HB 43 failed, several scenarios could play out. The city could:

  1. File for bankruptcy;
  2. Dramatically raise taxes;
  3. Continue to borrow money from unions running up the unfunded liability – or layoff union workers.

The bankruptcy option is never discussed because this process would remove the mayor as the decision maker on spending. Raising taxes would require lifting the revenue cap. Thanks to Bruce Hotze, lifting the revenue cap requires a vote by Houstonians. Mayor Tuner wants folks to vote on the revenue cap but not the pension bonds. If hypocrisy had a vote, the lifting of the revenue cap would fail. It is not an accident that Turner labeled his cap a corridor.

The revenue cap, approved in 2004, limits the increase in the city’s annual property tax collections to the combined rates of inflation and population growth, or 4.5 percent, or the lower of the two. Voters in 2006 adjusted the cap, allowing $90 million above the cap for public safety spending. Turner has not made his desire to spend above the cap a secret. Turner’s attempt to cap pension expenses and remove the property tax cap will be difficult for city voters to stomach.

The real story of Monday’s hearing was the testimony from the firefighters and their families. Many firefighters spoke, far more than any other employee group. The firefighters were respectful, polite, and prepared. The firefighters told compelling stories of the impact of HB 43. Firefighters argued that they negotiated with the city over wages and benefits and agreed to lower wages and higher benefits. Conversely, the police and municipal employees argued for higher wages. Now, the police and municipal employees want the firefighters to help them make up their pension liability shortfall.

Recently, the city has hired 700 new employees; but, hardly any police or fire employees. The city’s public works department has 4,000 employees compared to the more efficient county’s public works department that operates with 500 employees. The county’s public works department builds roads faster and better.

The city’s ability to borrow large sums from the unions by not paying them has allowed the bloated bureaucracy to breed inefficiency, redundancy, and a lack of accountability. Turner’s plan punishes the firefighters when they have been the responsible adult in the room for many years. Instead of bloated salaries, Houston fighters have been fiscally responsible by requiring a fully funded pension. Now, the pay scale between police and fire is significant.

Truth be told, the police cut a very fat hog and now they want their firefighter brothers to pay for it. Turner will do anything possible to pass HB 43 because it allows him to spend money at an irresponsible pace. The police and municipal employees want HB 43 to pass because it gives them a billion dollars to allow escaping union members to retire. Those left behind will have to deal with the increasing realization that their pensions may not be funded.

Some union members have figured out that the defined contribution plan (in contrast with the defined benefit plan) actually costs less and gives more than Turner’s plan. Social media is interestingly enough playing a role in disseminating information about the cost of the corridor. Huffman’s bill has been placed on the intent calendar for floor debate in the Senate this week. It could be called at anytime. Will Bettencourt filibuster the bill? It will also be important to watch what happens to SB 2190’s voting requirement. This is where Turner and the city’s lobby team will attempt to get rid of the voting requirement.

Pension March Madness

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The City of Houston gotsta get paid. For years, city leaders have operated with the philosophy of spending money that the city just doesn’t have. The Turner administration is no different.

Under Mayor Annise Parker, the media looked far and wide for a way to blame Republicans for the sins of liberal spending by a series of Houston mayors. Last legislative session, Mayor Parker took the position that Republicans refused to give her local control over the City of Houston pensions. Conversely, Parker promised the Houston Police Officers’ Union (HPOU) that she would not seek local control or use the city’s sizable lobbying forces to seek local control. Although Turner’s legislative strategy is a little more sophisticated and he is certainly more eloquent, he shares the same objective as Parker – keep on spending money and kick the can down the road.

Last session, State Representative Jim Murphy offered a bill for local control, which never made it out of committee. This was always the plan. Mayor Parker had to fool people for her last two years in office in order to keep spending money the city did not have in their accounts.

Mayor Turner’s dilemma is different because he was just elected to a four year term with a potential second term in his sights. After many years of working to assist city leaders in the legislature, Turner knew that his sneaky bastard plan had to be far more creative than Parker’s 2015 plan. Turner’s plan is simple: involve all three unions (police, fire, city employees), lobbyists, patsy legislators, and the Lieutenant Governor in the ultimate goal of spending money that the city doesn’t have in the coffers. I will count lining the pockets of lobbyists as a goal for discussion purposes.

Bill King has done yeoman’s work in holding Turner’s feet to the fire for a real solution to the pension problem. King ran on a platform of meaningful pension reform with the solution of moving all new employees to a defined contribution plan. Turner was endorsed by all three unions after he promised to oppose King’s defined contribution plan.

The three unions strongly oppose defined contributions because defined benefit plans are easily manipulated by politicians to benefit the unions. Defined contribution plans remove the politics from the equation. Thankfully and in the face of unfair criticism, King has remained engaged at the legislature in the defined contribution cause. March madness is in full effect and the Houston bracket of bad guy liberal spending is winning the tournament.

Turner knew that he had to employ a kick the can down the road strategy without being obvious. Turner’s first feat was to get Lieutenant Governor Dan Patrick and Senator Joan Huffman to agree with HPOU officials to take defined contribution off the table this legislative session. Ray Hunt, HPOU President, is a smart guy and is always covering bases. I like Ray even though I disagree with him all the time. He is a nice guy who does a very good job for his officers. They are lucky to have him.

Turner also lucked out when Patrick gave Huffman the position of chairwoman of the Senate State Affairs Committee where she is tasked with getting Turner’s bill through the senate.

Word started leaking out last summer that Turner’s scheme would employ a cap on city pension payments. So, the next time you hear Turner say he does not like caps – a la the property tax cap – remind the mayor that he is supporting his own version of a cap on city pension expenses, albeit a fake one. Beginning last summer, policy wonks immediately began speculating how Turner’s cap would work and whether it would it be enforceable. Turner was smart enough to call his cap a “corridor” – but, it is really a cap. Turner doublespeak.

State representative Dan Flynn chairs the House Pension Committee. Flynn’s bill, all 246 pages, has been circulated in the business community in order to garner the support of downtown types who are beholden to the mayor for handouts. Thankfully, King and members of the Arnold Foundation began analyzing the bill and sought edits that would tighten up the language. The devil is always in the details. King, Arnold Foundation representatives, and business leaders met with Senator Huffman in order to make crucial and necessary changes to Flynn’s bill. King and his crew spent hundreds of hours analyzing and tightening the corridor/cap language. The goal of these edits is to force the unions to adhere to Turner’s supposed principals. Anything else bankrupts the city.

Needless to say, after all the hours spent by King and others to tighten up the language, Huffman’s substitute filed on Monday is an exact copy of Flynn’s bill. None of the recommendations by King, the Arnold Foundation, and the local business community made it into Huffman’s bill. The good guys were played – Huffman was the secret agent. 

Huffman had probably been informing Turner and his lobby team of King and the gang’s recommendations all along. It should be noted that Huffman and her husband are longtime friends with Ray Hunt and Mark Clark, HPOU’s top lobbyist.

King has vowed to spend his time next year running against Huffman. King does live in her district and I believe that he is seriously considering the possibility. I will support him for his attempt to do the right thing on this issue alone. We will need to work with him on some other conservative issues but don’t forget that Trump came along too.

On Monday, I was present in the Senate chamber and testified on Senator Bettencourt’s SB 151 that was heard immediately prior to the Huffman pension bill. SB 151 requires a vote on the billion dollar pension bond by city voters. Huffman’s bill did contain this language but I suspect it will be stripped out in conference. Huffman has proven that she is not to be trusted.

Robert Miller, lead lobbyist for the city and law partner of Senator Whitmire, has covered his bases. Miller knows that Turner’s goal is a sleight of hand – appear as though he is doing something without actually doing anything. This was also true for Parker.

The goal is to keep spending money and lining the pockets of cronies. This fraud cannot happen if the bill actually worked because the unions would have to abide by paying their fair share. It was never the intention of Mayor Parker, Turner, Miller, or anyone in Austin to have this pension bill work as advertised. The goal was to grab the billion dollars and hand it over to the police and municipal employee unions so their retiring officers can make a fast break with their multimillion dollar pensions. Did you know that city taxpayers are making millionaires out of city workers? You know now.

Notice that I did not mention anything about the firefighters. The firefighters are actually the fiscally responsible adults in the room. Although their pension is far from perfect, it is financially much better off than the other two pensions. The billion dollar pension obligation bonds (POBs) proposed in Turner’s bill go to police and the municipal employees union. The firefighters get none of it.

The story gets worse for the firefighters because their pension is almost fully funded; but, they are being treated like the bad guys by city leaders. The city is asking for large concessions from the firefighters who are being punished for being good stewards of their funds. I say this because the firefighters always stood their ground and made the city fully fund their pension. The other two pensions did not and allowed a succession of Houston mayors to rack up a ten billion dollar unfunded liability.

Basically, the other two pensions have turned a blind eye to the out of control spending at the City and have taken lots of IOUs. Turner’s goal in all of this is to keep spending money that the city simply does not have. Turner’s pension plan is bogus and falls far short of his claims. Even worse, we really do not know the real fiscal health of the private equity investments held by the unions. The billion dollar pension bond could just be a starting point for the taxpayers. We need an audit by qualified, competent auditors who can be held responsible for erroneous financial information of both funds.

Either way, all of the actors in this year’s legislative tournament are behaving badly. Both Dan Patrick and Joe Straus have lined their pockets with union money. Do not think for a second that Joan Huffman acted without Pappy O’Patrick’s approval. Governor Abbott’s campaign has taken lots of money from unions; so, don’t expect him to do the right thing for Houston taxpayers.

Now is the time to fill out your bracket. My money is on the taxpayers losing bigly. The bottom line is that March madness has nothing on the drama at Texas Capitol. The next big game is Monday when Flynn’s bill is heard in the House.

Kingwood Tea Party Pension Debate

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The Kingwood Tea Party recently hosted a debate between Bill King (against) and Councilmember David Martin (for) on the subject of Mayor Turner’s pension plan scheme. I was curious to see why a “conservative” would support Turner’s scheme to continue to spend money at a level that has sent our city into insolvency. Following the debate, research of Martin’s campaign finance reports led me to understand why he supports Turner on this issue.

Date of Contribution Contributor Contribution
9/26/2012 HPOU  $        2,500
10/22/2012 Baker Botts PAC  $        1,000
10/19/2012 Houston Retired Police PAC  $           500
10/23/2012 Locke Lord  $           500
1/31/2013 Houston Fire Fighter PAC  $        3,000
6/21/2013 HPOU  $        2,500
4/1/2013 HPOU  $        2,500
2/25/2013 Houston Retired Police PAC  $           500
1/24/2013 HPOU  $        2,500
9/11/2013 HPOU  $        2,500
12/12/2013 HPOU  $        2,500
9/11/2013 Houston Retired Police PAC  $           500
8/12/2013 Houston Fire Fighter PAC  $        7,000
10/30/2013 Locke Lord  $           500
9/11/2013 Locke Lord  $           500
10/30/2013 Seafarers Intl Union  $           250
3/4/2014 Baker Botts PAC  $        1,000
11/30/2015 Seafarers Intl Union  $           250
5/11/2016 HPOU  $        2,500
5/11/2016 Plumbers PAC  $           500
5/11/2016 Locke Lord  $           500
5/11/2016 Houston Retired Police PAC  $           500
11/15/2016 HPOU  $        2,500
                                                              TOTAL  $      37,000

Nothing I heard during this debate changed my belief that the best and most fiscally conservative way to solve Houston’s pension problems is to file for bankruptcy and dissolve the city. The County does a much better job at running local government and they steal less.

The most disturbing new revelation is that the four actuaries hired to work on the Turner scheme have entered into a non-disclosure agreement (NDA). Say what? Yes, you read that right. Even though the taxpayers are responsible for the city’s poor financial decisions, you are not permitted to learn about the methodology behind the scheme. With that decision, you can be certain that the deal is going to be bad – really bad.

A previous City actuary Towers Perrin, predecessor to Towers Watson, provided actuarial services to the City of Houston for the original mess. The ridiculous numbers got us to this place and Towers was ultimately sued by the City of Houston for their fraudulent methodology. Towers was off by billions of dollars. This was not the only new revelation that came out during the debate.

The person drafting Turner’s bill is uber-liberal “Republican” Dan Flynn, a Straus henchman from Van, Texas. Flynn, House Pension Chair, reportedly drafted a 150 page bill for his union friends that promises to burn a huge hole in the pockets of every property taxpayer in Houston. The City has distributed the proposed legislation to the Greater Houston Partnership and the Arnold Foundation; but, you, the taxpayer, aren’t good enough to see it. Bill King made an open records request to the city, which was sent to Ken Paxton to delay release of the information. There is not a siren loud enough to alert taxpayers to these shenanigans.

As a state representative, Turner carried much of the union legislation; so, in reality, he is trying to “fix” his own mess. Turner along with Senators John Whitmire and Mario Gallegos (deceased) drafted and sponsored the chaos now being inflicted on the city’s finances. It should be noted that Gallegos was a city firefighter, so his support was self-help.

Turner’s conflicts include receiving political endorsements and contributions from these unions as a state representative and (three-time) mayoral candidate. Whitmire has actually served as an administrator of one of the unions. The conflicts, self-dealing, and corruption are fundamentally grotesque.

Now if the actuaries won’t tell you how they got their numbers and the politicians won’t let you see how this scheme is to be implemented, it is time for bankruptcy and dissolution. Our city government has failed.

Readers need to know that David Martin admitted during the debate that he has seen neither (1) the actuarial figures nor (2) Flynn’s bill. Yet, Martin defended Turner’s plan until the end.

This legislative session, the city is frantically attempting to add a 30 billion dollar mortgage onto the already heavy backs of Houston taxpayers. Thankfully, Senator Paul Bettencourt, the Tax Man, is trying to come to the rescue. Uncle Paul has sponsored a bill that would require a vote on the pension bonds that belong to Turner’s scheme.

Martin completely rebuffed Senator Bettencourt’s efforts, claiming that the Tax Man was meddling in the city’s affairs. So, I guess it is okay for senators who favor Turner’s plan to “meddle” but conservatives need to stay home and sit on their hands. Martin wants the taxpayers, including his constituents, to sit down and shut up.

I did speak with Senator Bettencourt who wanted me to quote him. Paul said, “It is frightening that the City of Houston is hiding the actuarial numbers and legislation. If the numbers worked, there would not be a need to hide them.” I concur.

I have linked the debate here for your own viewing pleasure-special thank you to Windi Grimes for making this available and recording the event!

Now, let’s discuss the debate. Before I do, I wish to thank the Kingwood Tea Party for hosting this event along with James Quintero, Director of the Center for Local Governance at the Texas Public Policy Foundation, for moderating the event, and a shout out to Windi Grimes for the use of the video. Since none of the participants had seen the numbers, the debate was highly philosophical and was really more of a discussion on policy.

Martin made a historical argument – the city previously issued pension obligation bonds or POBs without voter approval so the same practice should be a-okay now. The record should reflect that the city has never simultaneously issued a billion dollars’ worth of bonds.

Voters need to really think about this situation. Turner, et al. are dead set on issuing the largest bond ever NOT to repair or build one street, road, water or sewer treatment plant, or library. Every dime will go to the bank accounts of city employees.

Let’s analyze this for a minute. The unions – the same unions who hate investments because they do not like defined contribution plans – want a billion dollars for investments. The thought or idea that unions think investments are risky is blown out of the water by this request. So, the next time you hear a union rube tell you that defined contributions are risky because investments are risky, you should ask why they are demanding a billion dollars for investments. This concept is seemingly above Martin’s head, even though he is a financial executive.

Martin really does not like Senator Bettencourt’s proposed legislation (SB151), which demands a public vote by taxpayers. Martin kept stressing that the Teacher Retirement System of Texas (TRS) is an underfunded state pension. Senator Bettencourt and Bill King have repeatedly denounced the TRS financial problem. Martin somehow thought this argument would make it okay to hamstring city taxpayers because the TRS is underfunded. Faulty logic indeed.

King brought up the need for a public vote by city taxpayers; but, Martin was adamant that a vote is unnecessary and the time is insufficient. King responded that the city is already planning to put a revenue cap on the November ballot. Think about that for a second. Martin is telling his constituents that the time is insufficient to put the POBs on the November ballot; yet, the city is putting the revenue cap on the November ballot.

Make no mistake, this is the largest ‘kick the can down the road’ pension deal ever attempted by a Houston mayor. The fact the actuaries will not release their numbers combined with Chairman Flynn’s bill being hidden from Houston voters should cause all voters to sit up and pay attention. When you see Martin, a supposed conservative, arguing that a vote is unnecessary for the POBs but necessary for the revenue cap is the argument for bankruptcy itself. Are the cats sleeping with the dogs or is this something more?

Dallas wins the Bankruptcy Contest

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Who would have ever thought that the Houston pension problem would take a back seat to an impending City of Dallas bankruptcy? The word usage on the Dallas problem is phenomenal. Dallas’ present financial condition immediately morphed into the bankruptcy word because of their pension shenanigans.  I am sure Houston Mayor Sylvester Turner was thinking, “Can’t you guys wait until next session to use the ‘B’ word?” Mayor Turner is trying to sell another “kick the can down the road” pension bill, which will allow the runaway spending at the City of Houston to continue until his term in office is over. When Turner was a State Representative, he carried all the pension bills in the House for his hometown local labor leaders – the same bills biting him in the butt now. The irony of the Houston Mayor needing to pass the largest “kick the can down the road” pension bill should be lost on no one. The open discussion of a City of Dallas bankruptcy has everyone wringing their hands in Austin.

Local Dallas and Houston union officials set up a system at the state level over the years that allows union officials to rush to the legislature to renegotiate any deal they did not like offered by Houston and Dallas politicians. I have labeled this the “mommy may I” system. This system is about to come home to roost on the heads of House Pensions Committee Chairman Dan Flynn, his Senate counterpart Senator Joan Huffman, and Lieutenant Governor Dan Patrick.

Senator John Whitmire holds a special category of being a union pension fund administrator and someone who introduces legislation for union labor bosses. Think about that conflict for a second. All of these politicians have lined their campaign coffers with union money. The bigger the problem, the bigger the contribution. Senator Whitmire’s law partners act as lobbyists for the very unions he passes legislation for in Austin.

Lieutenant Governor Dan Patrick was supportive of these back door union deals Monday night at the Kingwood Tea Party. I reminded his host that Dan has always had his hand out to labor leaders and is not a fiscal conservative. Dan’s priority this session is a bathroom bill and he wants you to look the other way on pension matters.

Patrick, Whitmire, Huffman, and Flynn are not alone and have been joined by other pension committee members. This coziness has led to the economic reality of the Dallas bankruptcy. The lie of the Turner plan is exposed by the fact Dallas kept kicking the can down the road just the way Turner is attempting to do. Dallas started kicking the can in 1992 and Houston started in 2001. The fact that the whole scheme blows up is now evident to anyone who can add. Dallas is also seeking a billion dollars worth of pension obligation bonds in addition to local control of their pensions. Dallas politicians want direct control over their destiny by seeking local control back from the Texas Legislature.

Senator Paul Bettencourt is once again standing in the breach. Paul Bettencourt knows that Turner’s plan obligates Houston taxpayers to years of misery without doing a thing to correct the problem. Paul is sponsoring two bills: SB 151 (requires a vote by the public to authorize the use of pension bonds) and SB 152 (allows the transfer of new employees from defined benefit plans to defined contribution plans). Paul is threatening to filibuster Turner’s “kick the can down the road” legislation on the Senate floor. Senator Bettencourt needs our help and support in this battle. There is a website being promoted to help Paul’s effort, Houston taxpayers for pension reform. Please help him out by signing the petition supporting defined contribution plans.

Our local state elected officials are as clueless as Houston City Council Members, a very low bar. Their belief in campaign contributions has always exceeded logic. The Dallas bankruptcy claims are real and Turner can no longer hide the fact that Houston will suffer the same fate. Turner has added much ballyhooed sexy language like corridors and shared sacrifices to his messaging about the latest “kick the can down the road” scheme. Taxpayers need to understand that Turners’s scheme obligates 25-30 billion dollars in taxpayer funds to be used to pay people to hunt and fish. Actually, retirees will be paid more to hunt and fish than current public safety employees will be paid to fight fires and crime. Let that sink in for a minute.

No one is more culpable than Mayor Turner in the financial disasters that have befallen Houston and Dallas. The mayor is advocating borrowing a billion dollars he can’t pay back, combined with a negative amortization scheme that does not morph into real payments until he is out of office with the rest of the City Council. This is the classic kick the can down the road but here comes Dallas, always competing with Houston. Go Cowboys.

Further Reading

Pension debt and the Collapse of the City of Houston

A Greek Tragedy in Houston

A Special Council Meeting for a BIG Problem

 

 

Pension debt and the Collapse of the City of Houston

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Exxon Campus

The fake government economy is at a crisis point in Houston. All of the accounting gimmickry has been used and there is nothing left but a mountain of debt. Now, how do the pension tricksters fool the state again? I am not sure what Turner is looking for in the form of a fix; but, one thing is for certain, the taxpayers will be stuck with the bill. A big question to come – who is to blame? Turner’s strategy is yet another attempt by a mayor to kick the proverbial can down the road. The unfunded pension liability estimates range from 5.6 billion to 12 billion. Our municipal debt mirrors our national debt in many ways with one distinct difference: the City of Houston cannot print money.

State Pension Committee Chairman Dan Flynn brought his Pension Committee to the Houston Council for a hearing on June 13. Highly overcompensated city pension officials arrived with their own form of Enron accounting and glossed over the true financial condition with pretty PowerPoint presentations. A match was struck some time ago to the city finances and that match has now morphed into a blow torch. At the hearing, pension and union officials tried to paint a picture of stability when describing their system; but, it is anything but stable. Democrats on the committee sought to aid pension and union officials with covering laudatory comments. The salaries and benefits paid to Houston public employees are not real. I say this because their Madoff-style accounting system is designed to fool the taxpayers while giving political cover to elected officials tasked with hiding the massive fraud. All of this trickery is designed to keep the City of Houston paying out-of-market salaries and pension benefits.

Dan Flynn, a supposed conservative Republican, also praised the city pension officials during the hearing. Flynn was chairman two years ago when Annise Parker complained that she could not get the legislature to give her “local control” over the city’s pension system. The city’s pension system has been in crisis for the last five legislative sessions. Parker made these complaints after signing an agreement with the police union to refrain from lobbying for “local control” of her own pension system. You really cannot make it up; but, it does show the lengths that elected officials will go to perpetuate the fraud. Former Mayor Parker was endorsed for reelection by the police union the year she signed this agreement to not advocate for local control.

Chairman Flynn will be tasked to come up with some legislation fix. Speaker Strauss, also a big beneficiary of union political largess, will attempt to give cover to Flynn and his committee. The risk for Strauss and Flynn: how to give the unions what they want without making the legislature appear responsible. Of course, the legislature IS responsible. They, of course, are liable because state representatives were scared into thinking, by the unions, that big bad liberal politicians in Houston might one day want to undue the fraud and corruption. The legislature subsequently enacted  “Mother, May I” legislation, preventing the City from cutting union benefits. The question for Flynn will be whether he attempts to land the plane or jump out with a chute allowing the unions to auger in what promises to be a spectacular crash at this point. Flynn may attempt to captain this ship all the way to the ground – don’t expect it though.

At this point, the City of Houston has no possible way to pay off the massive pension debt. Pension officials will continue their party line: no problem here – look out thirty years to see the true picture. This position does not account for thirty-year-old rose colored glasses that could not possibly see over the mountain of debt. We will continue to hear the argument that we must honor our obligations, even though crooked politicians made them. And, we will have to except fewer services than we already receive in an attempt to perpetuate the fraud. Turner will continue his sleight of hand with the claim that he has fixed all the potholes and the taxpayers need to pay more money to feed the beast.

Liberal idiocy will be the governing thought process as Houston is smothered in a mountain of debt. It really is way past time to file for bankruptcy. If you are a Houston business, get out while you can. Halliburton, Schlumberger, and Exxon have all bailed. More businesses will continue to get out as they are expected to pay more for a less safe, less accommodating, broken city infrastructure. The city finances are not real. Save yourselves.

Further Reading

A Greek Tragedy in Houston

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