The City of Houston Pension Dilemma Continues
by: Pat Hernandez, February 7, 2012 2:02:00 am
When the Long Range Financial Management Task Force releases its recommendations to Mayor Parker, it will offer a range of options to address escalating pension commitments.
At the same time, a group of city hall employees will hold a rally at city hall. Cedric Hughes is with H.O.P.E., Houston Organization of Public Employees.
"We think that the task force has made some good strides in trying to help move the city forward, but there are also some direct attacks on the future working families of Houston, and we would do anything in our power just to make sure we protect our middle class."
Hughes knows that proposition is one that is easier said than done.
"Of course, easier said than done. Yes, cause we feel that their tactic is to look at a number and try to make cuts to fix that number. But then we feel in a couple of years, they'll be right back in the same situation, and trying to take more cuts from our middle class working families. And in order for us to be a partnership, we have to all be involved with this decision making process."
Another person interested in how the city proceeds is Bill King. The former mayor of Kemah was recently involved with the group Texans for Public Pension Reform. He says the task force will address what has been recognized to be a long term structural deficit in the city's finances and determine the best way to change it.
"As I understand, there's gonna be several different recommendations from different groups that are on that task force. But the fundamental, the structural problem with the city's finances are the pension contributions, and the defined benefit plans that the state requires the city to maintain. The contributions go up dramatically over the next decade. So either that's gonna have to change, or you're gonna have to raise taxes, or you're gonna have to cut services. That's the only three choices you got."
One out of every $11 in this year's city budget is dedicated to its three public employee pensions. In three years, it will be 1 in 7 general fund dollars. King says there is no easy route out of this problem.
"I do not think we ought to change the benefits that have been earned. We made a deal with the employees. They put in their time and promised them a benefit for the time that they served, and we need to buck up and pay for that. At the same time, we need to quit making those promises in the future, because we simply can't afford them."
The city has about 20, 000 employees on its payroll and a big portion of the task force's ideas for protecting the fiscal foundation revolve around pensions.