The Texas Public Policy Foundation (TPPF), an Austin-based conservative think tank, is warning that the state legislature’s efforts to try and fix the City of Houston’s pension woes could lead to even more trouble for the city and is urging local pension control.
In a recent blog post, political analyst for the TPPF, Bryan Matthew said the pension debt could cripple the city’s economy.
“According to its own estimate, Houston has overpromised on pensions to the tune of $7.7 billion and that figure is growing fast,” Matthew said in the TPPF blog. “This huge amount of pension debt threatens the city’s economy, credit rating and ability to deliver core services.”
Matthew warns the Senate bill for pension reform may seem good, but it has some underlying issues.
“To its credit, the Senate bill requires voter approval for pension obligation bonds issued after September 1, 2017,” Matthew said. “New debt should not be issued without an opportunity for Houston’s voters to weigh in. However, recent changes tie the agreed upon benefit cuts to Houston delivering the proceeds of the agreed upon pension obligation bonds by March 31, 2018 and this jeopardizes the delicate balance undergirding the reform effort."
Matthews said Houston’s pension reform travails are just another reason why the Texas Legislatures should get out of the business of governing locally focused pension plans.