Thunderous applause today as Houston voters went to the polls last night and approved $1 Billion dollars (plus $10,000) in pension bonds.
Reforms locked in as voters approve $1B pension bond. Houston Chronicle.com ($$$)
The article goes on to say that, if the bond failed, $1.8 Billion of the $2.8 Billion in negotiated "cuts" to benefits would roll back if the bond failed. It further explains that the "deficit" or "unfunded liability" (as people like to call it) currently sits at $8.2 Billion which means that Houston voters just agreed to refinance approximately 12.5% of the overall bill and are now having to sit and listen to what passes for leadership in Houston call the issue "fixed". Which it is, probably until current Mayor Sylvester Turner gets term-limited out of office. At which point the issue will flare up again and all of the people who are breathlessly calling this issue "over and done with" will be long gone as the community continues to deal with it. Remember when former-Mayor Annise Parker declared that she had "ended homelessness in Houston?"
Yeah, how's that working out.
It's as if Turner and Co. sat down with the unions and tried to determine what the bare minimum was that they could do in order to convince the public they had fixed the issue.
"Can we do it at 5%"
"No, way to low."
"20%"
"Too difficult."
"Let's call it a cool Billion and get the wordsmiths on it."
"Sold".
Or something along those lines.
Turner understands this, that the movers and shakers in Houston wanted this behind them, that they wanted a fix so they can move forward in 2018 to finally busting the pillow-soft, voter imposed revenue cap. The only way to do it, and keep all of the political patronage happy, was to tweak the plan around the edges, and pump a whole lot of cash into the system so that those in charge can get out on the taxpayer backs. This bond accomplishes that. Let future employees and elected officials, and taxpayers worry about the mess.
One note: The text of all the bond bills passed yesterday included language that authorized the city to levy taxes "necessary to pay off the bonds". My prediction is that this enabling language will be used as legal justification to circumvent the revenue cap in the way of massive property tax increases on individuals and businesses. In other words, we're going to court over this I guarantee it.
Mayor Turner however will, rightly, consider this a political win and should start to pivot toward projects designed to establish his legacy. Right now he's had few ribbon cuttings and his name is on no plaques. This is an untenable situation for a man whose career goal was to become Mayor of Houston and get his name put on things. I'm sure he's hoping for more than a sidewalk in a downtown dog park.
For now Turner gets to enjoy his victory lap having successfully pushed this problem to the next administration. This allows him an opening to pivot toward figuring out how to tax Houstonians until their eyes bleed.
Happy Holidays.
