Rice University’s Kinder Institute has done the preliminary math on Mayor Sylvester Turner’s historic pension reform plan and determined the numbers appear to add up if all of the components are implemented as envisioned. The institute is one of several agencies to analyze the mayor’s proposal since it was unveiled last week.
“I welcome scrutiny of this plan by experts because it helps address the unfounded arguments being made by others who have no financial background,” said Mayor Turner. “There is no doubt this plan relies on a complex package of reforms. Without implementation of each piece, we will not achieve the anticipated results. Thankfully, the pension systems are sharing more data than ever before and are committed to continue working on information sharing so we can manage costs going forward.”
According to Kinder Institute Director Bill Fulton, the mandatory cost containment provision in the mayor’s plan, if executed properly and consistently over time, could provide a way for both sides to share in the upside and sacrifice when times are tough. Fulton said the plan outline seemed to show “shared sacrifice” on the part of both the city and its workers.
The Kinder Institute did the initial analysis in a blog post the day of Mayor Turner’s announcement based only on information that is publicly available. Mayor Turner did not request the analysis. A more detailed analysis is expected later.
The Kinder Institute’s analysis can be found here: Kinder Institute Pension Analysis.
Here’s that URL again, and more on the pension deal itself can be found here and here. The KI piece basically says that if everything works out as planned and envisioned, then the long-term funding gap can be erased. If you’re thinking that’s a pretty big “if”, you’re right, but the bottom line remains that the plan is plausible. Some legislation will need to be passed next year – I have no idea what Plan B is if that fails to happen – and before we get to the point of writing a bill and finding a sponsor, we need buy-in from the firefighters. That’s a non-trivial amount of work to be done, but at least there is a roadmap that may be used by all the vehicles in the procession.