Houston Chronicle editorial: Turner’s moment
With Abbott’s OK, a pension reform plan will end a threat to the city’s financial future.
May 25, 2017 | Copyright 2017: Houston Chronicle
Give Mayor Sylvester Turner credit.
In less than 18 months, Turner has pulled off what once seemed an impossibly complicated task. The Texas Legislature has given its blessing to a complex and arduously negotiated deal that will begin digging Houston out of its multi-billion-dollar pension debt hole. Plenty of people deserve praise, from the pension fund leaders who agreed to concessions to the state lawmakers from both parties who ushered the deal through the Legislature. But this is Turner’s moment, and it is his finest hour.
This deal’s importance to our city’s future cannot be overstated. Without it, Houston would’ve been headed for a fiscal calamity triggering thousands of layoffs and dramatic cutbacks in vital city services, almost certainly including the police and fire departments. Indeed, some of the smart people who studied this subject concluded pension debt could’ve driven our city into bankruptcy. Instead, there’s now a ceiling on what once was a seemingly limitless liability facing city taxpayers, and there’s a clear and defined path out of this fiscal wilderness.
Here’s how it happened in a nutshell. Flawed studies projected that benefit increases enacted in 1997 and 2001 would cause costs to increase, but only slightly. Instead, the expenses spiked much higher than predicted. Faced with mounting shortfalls, the city government started underpaying the amount needed to cover the difference. By the time Turner took his oath of office, our city had amassed $8.2 billion in pension debt.
Turner was uniquely qualified to tackle this ominous threat. As a longtime state lawmaker from the minority party, he had spent decades brokering deals between stubborn people on opposite sides of difficult issues. As a Democrat backed by organized labor, he had the standing to convince pension board leaders that the current system was unsustainable, and unless they came to the bargaining table Republican state lawmakers might mandate reforms that city employees would dread. As a result, this deal includes a $2.8 billion cut in employee benefits.
Of course, everybody didn’t get everything they wanted. Firefighters who initially bought into the mayor’s plan pulled their support and lobbied against it. The mayor wanted to avoid a voter referendum, but lawmakers added a requirement that Turner’s proposed $1 billion bond issue appear on the ballot. The deal looked like it was in trouble just a few weeks ago, but ultimately it passed through the Texas House with the support of more than two-thirds of state legislators. That level of support means the bill will take effect in July rather than September, which will save the city an additional $20.5 million.
The fight over Houston’s pension problems still isn’t over. City officials have always been confident Gov. Greg Abbott would sign the legislation, and we urge him to do just that as soon as possible. Voters still have to decide in November whether the city should be allowed to borrow $1 billion in a bond issue that’s a key component of this accord. And firefighters upset over the deal may go to court.
Still, the mayor deserves a victory lap. Turner has earned his place in Houston history by cutting a Gordian knot that threatened to strangle our city’s financial future.