Mayor Sylvester Turner’s pension reform package is racking up positive reviews from numerous groups. The increasing momentum comes as the mayor is working to round up support in Houston’s business community.
“While some continue to criticize without offering any alternatives, others are taking a hard look at what we have proposed and concluding it’s a solid plan,” said Mayor Turner. “These groups span the spectrum of political philosophies. This will be very helpful as the debate now shifts from Houston to the state legislature in Austin.”
Mayor Turner has made a formal request to the Houston business community for an endorsement letter that he can take to the state legislature. The request follows numerous presentations of his pension package to corporate leaders. “Our police, fire and municipal employees need to hear that we are going to Austin together,” said Turner. “This is one time we can say to the rest of the country that we are getting it done in Houston. Let us show you the way.”
The mayor’s plan will eliminate nearly $8 billion of unfunded pension debt that is contributing to a decline in the city’s credit rating and hindering the ability to pay for city services. It will provide the City with structural budget balance moving forward and will result in more than $200 million of cost avoidance in its first year. It provides immediate and long-term benefits while also creating secure and stable retirements for employees at an affordable price for taxpayers.
The following represents a sampling of quotes about Houston’s plan:
“Obviously, there’s still work to be done, but the mayor has made great progress. 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.” – Marc Watts, Chair of Greater Houston Partnership Municipal Finance Task Force
“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 time for action is now. I strongly urge support for this pension reform plan.” – City Controller Chris Brown
“More than just about any other city, Houston has succeeded in developing an economic base that will keep overall taxes low and support our valued public employees well into the future,” – Max Patterson, executive director of the Texas Association of Public Employee Retirement Systems
“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.” – Bill Fulton, Rice Kinder Institute for Urban Research
“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. What’s more, the system would immediately incorporate a more realistic investment rate of return assumption in valuing its pension liabilities.” – Governing Magazine
“While it appears that this reform plan doesn’t really change the cost all that much, in fact it makes it go up a little bit, the mayor and his team are being more honest about the actual cost of the plan. Previously, the city did not paint a true picture of what the plan cost was.” – Josh McGee, Arnold Foundation
“POB use in conjunction with reforms to benefits and contribution practices increases the odds of strengthening funding positions and improving long-term sustainability.” – Fitch Ratings