A state lawmaker carrying Houston’s pension reform bill says her version of the proposal will require a public referendum on a $1 billion cash infusion central to the negotiations, an idea Mayor Sylvester Turner called a “poison pill” that could derail the reforms and force “massive” layoffs.
The requirement that voters have a say on the $1 billion in pension obligation bonds is the brainchild of Sen. Paul Bettencourt, R-Houston. Fellow Houston Republican Sen. Joan Huffman, who is carrying the reforms in the higher chamber, said she understands the mayor’s frustration but said her bill – which still is being drafted – will not pass without the provision.
“It is a billion-dollar bond, and though it’s not new debt – it’s debt that the city owes to both the police pension fund and to the municipal pension fund – I can understand how the voters would want to have a voice in the issuance of the bonds,” Huffman said. “To get it out of the Senate, it’s a necessary addition to the bill.”
Turner’s reform plan, despite ongoing wariness from the firefighters’ pension fund, emerged from a year of negotiations in Houston with broad support from civic think-tanks, business leaders and pension experts, as well as a 16-1 endorsement from City Council.
“That is a poison pill, and you are saying you want this deal killed – and it will kill this deal,” Turner said at Wednesday’s council meeting. “If that’s the course that the Legislature chooses to take, then the Legislature must also say to people in this city – to businesses and property owners – ‘We are assuming responsibility because the state can do it better.'”
Turner also sought to spell out the consequences if the reforms fail: still-rising pension debts, an additional $134 million added to an already sizable deficit in the coming budget, and “massive layoffs” touching every city department.
Boy, between this and the Astrodome and the revenue cap and maybe another Metro referendum, not to mention the May recapture re-vote, this may wind up being a far busier election year than it would have with just the usual slate of city races on the ballot. I’ll be honest, I had thought from the beginning there would have to be a vote on the pension obligation bonds, but it turns out that’s not the case thanks to a law passed in 2003. The rationale is that this is not new debt, since the city in this case already owes the money. Be that as it may, I don’t necessarily object to voting on them, though I have to wonder once again why Houston is being singled out like this. What’s the rationale for having a vote, other than “it’s a lot of money”, which as a reminder the city already owes? Paul Bettencourt says “anytime you consider $1 billion of anything, the public should vote on it first”, but if that’s the threshold then why is there a bill to vote on $100 million of Astrodome spending? The thing about having a vote is there’s a winner and there’s a loser. If there is a vote on pension obligation bonds, who’s rooting for Yes to win, and who’s rooting for No? It would be nice to be clear about that before we go on.