It really is because it distills into a simple, reasonable question: Is the proposition good for the city?
If you recall, I asked, no, that’s not right, I begged the Houston Chronicle’s newest hire, Ericia Grieder, to take a look at the issue and render a verdict. I did that because I knew from past experience that she is (a) an expert on economic issues, (b) she is new to the city and the issue and (c) she really doesn’t care if you are a liberal or a conservative, she’ll call the balls and strikes as she sees them (heh, I had to get a baseball reference in there, right?). I even committed to purchasing a subscription to the Chron if she would write about it. She did and I did. Here is part of what she had to say:
Everyone agrees that Houston needs pension reform. The city has three public pension funds, for police, firefighters, and municipal employees. They are, as it stands, only 55 percent funded. The unfunded liabilities work out to $15.7 billion. The city’s share of that would be up to $8.2 billion, depending on how shrewd the fund’s managers might be.
Sylvester Turner campaigned on the issue while running for mayor in 2015, and the pension obligation bonds are part of the plan he proposed this year and pursued in the 85th Legislature. The result, after extensive negotiations, was Senate Bill 2190, authored by state Sen. Joan Huffman, R-Houston. Its terms call for city employees to contribute more to their pension funds and accept $1.8 billion in benefit cuts in exchange for an infusion of cash via the pension obligation bonds. It also limits the risk of future cost increases, through a financial corridor provision that caps the city’s contribution rates.
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The deal itself is not perfect, for a variety of reasons, and conservatives may see it as a Band-Aid, because city employees would still be enrolled in defined-benefits plans. Fiscal conservatives are wary of that approach, in general, because if the benefits are defined, the costs of the plan itself are necessarily indeterminate. They can easily be higher than expected, and often are.
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All of this raises some reasonable questions about the city leaders urging voters to approve the pension obligation bonds, as it might if someone asked you for a loan so they can pay off their credit card. Another loan, that is; Houston already has about $600 million in outstanding pension obligation debt.
“Issuing the bonds eternalizes a failed pension system,” argues Bill Frazer, who ran for city controller in 2015.
I can see where he’s coming from.
Still, I disagree with his conclusion. A billion dollars is a lot of money, but Houston voters are already on the hook for more than that. And passage of Proposition A would help lessen the burden, in addition to its sting. Interest rates are low. Houston’s municipal debt has a decent credit rating. The deal, as mentioned, includes significant benefit cuts – which can be rescinded, if the city doesn’t come through with the pension obligation bonds.
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In my view, the passage of Proposition A would be a good thing for Houston. The measure is reasonable in itself, and it’s only one part of the pension reform deal – a deal which may not be perfect, but is already done.
(click to read Pension reform deal may not be perfect, but it’s good for the city on HoustonChronicle.com)
A couple of things that she writes stand out to me. First, as I told you, she will listen to all sides (if you click on the link to the full article, you’ll see more of that). Second, she doesn’t hyperventilate over it, she simply states her opinion after reviewing it. And lastly, she distills it down to the essence of the issue: is it good for the city?
Clearly the issuance of these bonds (substituting high cost debt for low cost debt and future concessions from employee unions) is a net positive for the city. No serious observer can make a case against that basic premise.
Most of the opposition is based upon the fact that the City of Houston has been controlled by liberal Democrats for many years. Something along the lines of ‘you get what you ask for’. And that is completely true. But finally, after years of neglect, conservative Republicans have stepped in and come up with a plan that, while certainly not perfect and certainly not all encompassing, is good for the city’s future. Which means that it is good for the taxpayers in the city.
Hopefully the voters will agree with conservative Republican State Rep. Jim Murphy and vote for Prop A.
I heard that ad today on the Charlie Pallilo sports talk show on 94.1 FM in Houston. Talk about a micro targeted ad! Whomever is running that campaign is seriously good at recognizing who votes and who doesn’t. If you even know that Pallilo is back on the air and you tune in to a small FM station to listen to his highly analytical sports commentary, there is a high probability that you are a voter. In fact, as a political nerd, I’d guess it was close to 100%.
I was thrilled because some of us have been advocating for years that Harris County Republicans should spread their wings beyond conservative political talk radio. As best as I can remember, Harris County Judge Ed Emmett is the only Republican to recognize this, appearing multiple times on sports talk radio. Listening to Rep. Murphy’s ad and knowing that Republicans can indeed adapt to the politics of a purple county is very heartening.
Hopefully, Republicans will cast aside their inclination to oppose anything that Democrats propose, look at the facts at hand and vote FOR Prop A.
It really is good for the city.
David Jennings and Peter D. A couple of rubes living out of the city advocating for higher taxes for those of us in it.
Did y’all know passing Prop A nullifies the property tax cap?
Did you know the unions were able to get the pensions isolated from community property? Spouses beware.
We’ve already paid for these retirements though our taxes. That the employees didn’t care until now their mayors weren’t funding their plans is on them.
Give the firemen their portfolio and let the Kline-Miller regs sort out the rest. There is no reason for the larger populace to continue this charade for the 30,000 or so that will reap the windfall.
And why aren’t the amount of funds in the DROP accounts available to the public prior to this vote?
Jim Murphy sold out and needs to be primaried. I’m thinking the same is true for Dan Patrick and Joan Huffman.
My hunch is the vote will garner under 150,000 votes. It will pass with 50.1%. And people with the means to do so will leave.
Houston was a unique city.
“. . . .city employees would still be enrolled in defined-benefits plans. Fiscal conservatives are wary of that approach, in general, because if the benefits are defined, the costs of the plan itself are necessarily indeterminate. They can easily be higher than expected, and often are.”
The problem with that statement is this: the costs of the plan are ALWAYS higher than expected, because no one is willing to figure the costs on a worst case basis. The costs are always figured on a best case basis and when stuff happens (and it always does) costs “unexpectedly” rise. Houston is once again kicking the can down the road. Maybe it’s a better deal than what was previously in place, but that’s like saying that terminal cancer is better that a massive heart attack. You haven’t fixed the problem you’ve simply put off dealing with it.
Meanwhile the City keeps electing politicians like Sly Turner, who will continue to look for ways to give away taxpayer money in order to stay in office.
The good news? I don’t live in the City of Houston. What a relief. . . . . .
Houston could terminate all pensions today, and would still owe the $8 billion in earned benefits. Passing the bonds reduces the overall costs of clearing the unfunded liability. Changing the type of pension is a separate issue that we should discuss, but pretending that a defined contribution plan would fix everything ignores reality.
And, for those of you who way “I am on a defined contribution plan with no COLAs, so let’s do that to the City employees, you forget you are likely contributing to Social Security, which does have a COLA provision. I would modify the City plans to remove COLA from the regular pension portion, but leave it on the piece that’s roughly equivalent to social security. I would also change the payout percentages to reduce them for anyone who takes a pension before age 60.
The ballot language does make the bonds not subject to the revenue cap. That’s a good thing, since revenue caps are awful public policy. Especially the ones that include enterprise fund revenues (water, sewer, airport, etc), since those can vary tremendously depending on activity.
Feel free to move out of the City, your taxes will almost certainly go up for an equivalent house.
Dan, again with your childish name calling, you’d think your arguments could stand on their own without such comments, and they can, to a small degree, but I’d like to see proof of your assertions regarding the nullification of the tax cap and the stated claim about pensions in family courts because I know too many firemen and cops that found out otherwise. Sure, some employee works 33 years for a pension and gets married five years later will not likely have to give up that pension, community property applies to assets earned during the marriage, but if a few individual courts locally are not following standard practices, vote those judges out, right along with the judges that let scofflaw deadbeats slip out of paying child support.
The existing deal is the best the Mayor and City Council could get and the entire state legislature agreed with a super majority of support, even some of the holdouts admitting they wanted it to pass. I can understand people not caring for the Lt Governor or even the Governor himself, both of who supported the measure, but how many conservatives find fault with Paul Bettencourt, the popular state senator who is on record as supporting it too? If you believe all these people are in the pockets of unions over the interests of the voters, do tell what your plans are to kick all of them out of office for an even more right leaning group because nobody believes that is going to happen either.
And having heard the Chicken Little version of how people are going to leave the city limits en masse, some even claiming against certified US Census statistics how that has happened, for years now, all the while property valuations have steadily claimed and more people continue to move in, by all means vote with your feet and join us in paying more for less out here in the county where Ed Emmett is gearing up for some major bond issues himself in the near future. Albert calls it accurately in reminding us all that the voters keep voting the same types of candidates into office yet you want to wash your hands of any responsibility?!? That doesn’t sound very conservative to me.
You paid for all the services and governmental perks you demanded of politicians while they were running up a growing tab on the credit card. This is not news, Bill Frazer has run for office on that platform for years and voters rejected him, the same for Bill King, and others. Those who advocate skipping out on their bills, well let’s just say that no sane person calls such folks “fiscal conservatives” and I won’t lower myself to list some of the names deadbeats are given in these here parts. Suffice it to say that passing the measure moves the ball forward and when you get your imaginary dream team legislative body seated in Austin, you can work on finishing the job.
As a voter and resident of the state of Texas for decades, I say the state should sever any ties to such deals, let the workers and politicians come to their own arrangements without wasting valuable legislative time. While the body should have been passing comprehensive property tax reform, school funding, and any number of truly statewide matters of importance, they were dealing with city-specific garbage. Pass a law requiring all cities to pay what they owe, when they owe it and not dabble in the details. Cities that elect the same type of people can then learn how services will have to be cut or taxes raised in given years, let the demand for change come from them.
“We” most certainly did not vote for these people. It is hard to win an election when so many voters are city employees with strong financial incentives.
Also, flight from the city has definitely occurred. While the census may show an increase in population, how much bigger would it be if not for city policies? Just look at katy, sugarland, woodlands, cypress, etc, for proof that the city tax base has been hit hard by folks voting with their feet.
To stay we need good school options, flooding reform and reasonable taxes. Don’t say it cant.be done because many neighborhoods outside the city have all three of these.
“We” clearly refers to the electorate as a whole, a good many Republicans not voting translating into letting others decide the fate of the city. The closest vote in years provided liberal Turner with the win yet the alternative was a man who stated that all debts were to be paid so there’d have been no relief going that way either. When was the last time the GOP fielded a truly conservative candidate for mayor and backed him financially? It was prior to Kathy Whitmire.
One of the biggest complaints about city employees is that few of them live inside the city so I’m not sure how they are voting in these liberal candidates against the wishes of the other 2.3 million residents. According to Don and others commenting here in the past, over 90% of public safety employees live outside the city so you’re going to have to make up your mind with which argument you prefer, and then prove it against the other.
Whether or not the city would have grown faster or more is not relevant when the argument was the city losing population “like Detroit”, a city that lost over half it’s population while in decline. The fact remains that the population of Houston has grown and housing prices have gone up, not one shred of evidence that a net population loss is even likely.
I’d be curious to hear where all these communities with good schools, reasonable taxes, and flooding reform are located. I’ve compared taxes & fees as a whole (apples to apples) and unless I want to spend a great deal of time and expense commuting from two or three counties away each day, none qualify as great bargains. Good schools is another factor that is hard to quantify, if your kids are intelligent enough they can find great schools in HISD or one of the private schools while if they are not, the best IDS’s in the state aren’t going to help much. I find the flooding reform comment interesting since no place locally is engaging in the kinds of reform needed, so far it is all talk and no walk.
My observations contradict your own in other ways too but the city really doesn’t need to expand, it is already too large to properly govern, the GOP needs to offer a superior candidate and back him, and all voters need to push for flooding reform on a wide scale regardless of political affiliation. If you believe moving outside the city of Houston will remove you from its influence, prepare to move a great deal further than you might like. As such, it makes more sense to stay and fight rather than concede to the liberal elements that have shown a willingness to spread to Harris County and beyond.
Peter, it seems you are arguing against a straw man you have created in your own mind.
The election is today so it will soon become moot, anyway… Until next time.
It seems the firehouses will be coming out in force today voting AGAINST the pension bond so as not to ratify the deal to raid their pensions. With 6% turnout in the early voting, the low turnout monster could wreck Turner’s agenda.
Voter, I agree completely that 1) the election will soon be over and 2) this isn’t the last we have all heard of it. I further believe that our state legislators will eventually be forced to waste many hundreds of hours finishing the job at the expense of better things for them to do.
The thing you seem unclear on, among so much else, is that the cuts to HFD’s pension are not directly tied to any of these bonds. If Prop A passes, they get no money and if it fails, none of their benefits are restored as with the municipal and police pensions. The resulting cash crunch for the city if they fail will, however, result in layoffs among their branch of service as well as the others.
I voted against the pension bonds. I am under 40 and self-financing my retirement. I had nothing to do with this pension disaster and I’m being forced to finance someone else’s retirement. If the employees were paid modestly like teachers I would be okay with pensions. Public service has historically been associated with modest pay, but these city employees do quite well. Their retirement perks will only make my retirement more expensive. Put them on a defined contribution plan. I’m happy to play the long game and wait for it to become obvious they need to make the switch.
Everyone actively involved in Republican politics in past years knows there are few activists more financially conservative than me. I am also a Houston voter, so I have a stake in the pension bond vote. Unfortunately, neither passing or rejecting the bonds fixes Houston’s pension problems, which left unresolved will eventually bring financial ruin to the city.
Certainly the pension legislation does not come close to bringing a final solution to Houston’s pension problems. But, passing the bonds will reduce the city’s pension liability and future costs.
On the other hand, a rejection of the pension bonds is a vote for “blowing up” the city’s finances, or to bring Houston’s financial problems to a head now. My judgment is that accelerating the city’s financial reckoning at this time is not a good decision. The city is still recovering from the Harvey floods and dealing with the effects of a struggling oil industry.
I have decided it is best to hold your nose and vote “for” the bonds.