When you find yourself in a hole, the first order of business is to stop digging. That's what we did - and pardon the pun here - with the pothole crisis. That's what we did with the biggest budget gap since the Great Recession. And that's what we are now doing with pensions. That's historic, but the even bigger news is the renewal of the can do attitude and cooperative spirit that has served our city well since its founding. Instead of continuing to fight as they have in the past, a broad spectrum of Houstonians are now putting aside their differences and working together to dig us out of this financial hole.
Through their pension governing boards, our City employees have put $2.5 billion of concessions on the table. These hard-working public servants are giving up benefits to which they are entitled in order to create a more stable future for our city. City leaders are promising to no longer fudge on what we owe to City employees every year. The business community and legislative delegation are helping to get the plan enacted into law. And, as I have said many times before, I will later ask taxpayers to step up and share in these sacrifices by agreeing to repeal the revenue cap that is crippling the City's ability to meet its growing needs.
To read the full text of my announcement, go here.
McGee said that provision, if strictly enforced, would help make the proposal -- one of the better reforms in the country -- (T)he good thing about the plan is that cost is now capped, whereas before it wasn't. We're in a fundamentally different situation than we were before.
It's a new idea with great potential to solve a 15-year old problem in Houston. And, if the "corridor" mechanism is airtight and works as intended, it could become a case study for cities across the country.
Indeed, Turner's proposal appears to strike the right amount of give-and-take that's required for all parties to get on board. First, the city is stepping up in terms of accountability, meaning it would be required to make its pension payment annually.
[The pension proposal] offers a clear path toward a sustainable retirement for city workers at a very uncertain time for city finances. I commend Mayor Turner and all stakeholders for their commitment to addressing an urgent problem in a timely manner. The longer we wait to implement a solution to our pension challenge, the more difficult it becomes for the city to succeed in solving it.
The numbers for Mayor Sylvester Turner's pension reform plan generally add up, and the reforms generally move Houston in the right direction. In fact, this pension reform plan should be viewed by other cities as a national model, especially its risk-sharing aspect.
I am very pleased with the Mayor's proposal because it actually includes a structure. It used to be that if the pensions board misestimated the amount they needed, then it just fell on the City and the City was required to pay that amount and that's what's happening in Houston and Dallas. Under the Mayor's plan, there are actually consequences to making bad estimates, and that's going to give the pension review boards as well as the City the proper incentives to make the right assumptions. That's what we need. We need a system that incentivizes the parties to make consistent decisions, not decisions they know are probably off.
Houston owes its police, fire, and city workers about $7.8 billion, and it doesn't exactly have the cash on hand. Their hard-fought solution could serve as a model for the rest of Texas, and the nation.
In a 7-2 vote this week, their pension board agreed for the first time ever to cut benefits for current workers and retirees. The pension boards for police, fire and municipal workers simply may have trusted Turner more than past negotiators...
Mayor Sylvester Turner is garnering praise for his proposal's comprehensiveness and balance.
Experts organized by the Kinder Institute for Urban Research weighed in Houston Mayor Sylvester Turner's newly-unveiled pension reform proposal at a panel discussion Tuesday - the same s ay ratings agency Fitch concluded that Turner's proposal "could improve the sustainability of the city's pensions."