HOUSTON — Houston Mayor Sylvester Turner announced Monday he has reached a preliminary pension deal with city employees, police, and firefighters. Our city's hero currently receive varying amounts of money from city pensions when they retire.
It's supposed to be the longer you work for the city, the more money you earn from your pension when you retire. Big problem: there hasn't been enough money to pay those benefits. All three pensions program are underfunded by $5.6 billion this year alone and the city has repeatedly failed to make its full contribution to the individual funds.
Turner has been negotiating a solution with all three funding boards the past seven months. He revealed his fix Wednesday afternoon during a news conference, where he called it a budget-neutral 30-year fixed payout plan.
“This is not a perfect plan," Turner said. "But it's a doggone good one.”
To avoid billions in future cost, Turner's plan has three key components: issue a billion dollars in bonds, assume more realistic investment returns and reduce benefits.
“The only way this makes any sense is if you repeal the revenue cap, and then you significantly increase property taxes,” Bill King, Turners opponent in last year's runoff election, said.
All three boards have agreed to the reform package in principle, but they have not identified specific benefits reductions. It's a hurdle firefighters don`t want to jump, but Turner said it's not negotiable.
“There is no other solution," Turner said. "There is no other solution that provides the relief and certainty of the plan.”
President Alvin White of the Houston Professional Firefighters Association said firefighters aren't real familiar with the plan.
"The pension board is, and the mayor is, but the firefighters (who) are actually doing the work on the field, do not understand the plan because they do not even know what the plan is."
Once leaders of each fund are on board with all the proposed changes, Texas legislators will have to be because they control the city's pension system.
So basically, Wednesday's big reveal was a plan for a future plan.