Easing revenue cap won't solve city budget gap, official says. Katherine Driessen, HoustonChronicle.com ($)
(They leave the content of most interest to Houstonians behind the pay-wall. Same drill: Short quotes, please go read the entire thing if you can)
But projections put the revenue lost to the cap at just 12 percent, or $17 million, of the deficit next fiscal year, which begins July 1, 2015.
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Some council members said they wanted a clearer understanding of how the city ended up in such a bind.
To the first point. $17 Million is just 10% of the projected fiscal shortfall in 2015. It's less than that for 2018 projections. What this means is that, in addition to getting the cap revoked, the City is also going to need to raise taxes.
At this point your thought might be that the City would do something, anything really, to alter pensions and reduce the cap even further. Maybe they'd even consider (gasp!) reducing some services? (As Council member CO Bradford suggests in the article)
If you've been following this for any serious period of time the answer to those questions are pretty clear.
Of course they won't.
How we got here is fairly simple. In 2001, then Mayor Lee P. Brown went ahead with a fiscally unsustainable hike in pension benefits despite being advised to the contrary. Brown had political cronies to pay off, and he did so.
In 2004-2005, then-Mayor Bill White (who, it should be said, is suddenly trying to morph into a deficit, debt hawk) exacerbated the problem, with the full consent of now-Mayor Parker, by adding to the debt load and placing a Band-Aid on the cancer by transferring the downtown hotel into the fund to mask the damage.
At the time those of a progressive political financial persuasion suggested that all of this was just fine, that Houston was doing what it needed to do to be a "World Class City" and that increased pension benefits were necessary to allow the City to be competitive with the private sector in hiring. This thinking was silly of course, because the City will never truly get the best and brightest and public-sector unions being what they are, don't really have any good options to eliminate employees who are not performing up to par.
Meanwhile, what passes for leadership in Houston continues to dither and make vague threats of staff lay-offs and furloughs. Yes, this might happen in a crunch, but we've heard all of this wailing and gnashing of teeth before regarding Houston's pension system.
The real problem is there's no true political will to change city pensions. At best, these are campaign promises as either term-limited officials with visions of higher office or non-term limited officers trying to keep their nose in the trough trumpet how "tough" they're going to be on pensions. That none of them seem to have an understanding (even now) of how the City got in this position tells you just how much trouble Houston is in.
When you cannot even connect the dots (as politicians love to do) then you cannot understand the root cause of the issue which is that the City has a spending problem. Houston is like a college student with their first credit card and everything in the candy aisle is 10% off. They just cannot help themselves.
Given this, I would place the odds at 20/1 that any meaningful reform in spending will be accomplished here. I'm sorry Houston, but the favorite in the paddock at 2/1 is that there will be a full-court press to release the City from the padded hand-cuffs of the pillow-soft Proposition 1 cap and then follow that up with massive increases in taxes and fees.
For progressives, this will be greeted as a good thing provided two things: 1. That the City increases taxes on businesses that they don't like and 2. That the brunt of the tax increases are felt by those people making just a little bit more than they.
