Petition calls for vote on city pensions
Move would force new employees into 401(k)-style plans next year
Voters soon could decide whether to close Houston’s traditional pension plans to new employees after political activists submitted a petition to City Hall to force a referendum this November.
The petition further complicates Mayor Sylvester Turner’s efforts to pass a pension reform bill, which already had hit a hurdle in the state Senate this week on precisely the same issue of whether new hires should be put into “defined contribution” plans similar to 401(k)s instead of one of the city’s three employee pension systems.
The petition, which began circulating at college campuses, grocery stores and elsewhere in February, calls for a public vote to require a shift to defined contribution plans for all city workers hired after the start of 2018.
Under traditional pension plans, the city promises employees specific payments based on their years of service and salaries and makes up for market losses by putting in more money. Defined contribution plans are those in which the city and employee set money aside in an account that rises and falls with the market.
Windi Grimes, a public pension critic and donor to the Megaphone political action committee that sponsored the petition drive, said the group submitted 35,000 signatures to the city secretary’s office Thursday. That easily would clear the 20,000 signatures required by law to trigger a charter referendum, provided City Secretary Anna Russell verifies the names.
Grimes, who also works with Texans for Local Control, a political group that wants Houston, not the Texas Legislature, to control city pensions, had described the petition effort as an “insurance policy” in case the Legislature does not move to defined contribution plans for new city employees.
Turner and the city’s unions oppose defined contribution plans, saying that approach is insufficient to protect workers’ retirement benefits.
“We look forward to a full and thorough debate on the merits of the proposal,” Grimes said. “We only submitted these signatures because it is still unclear if the Legislature will be able to pass a true long-term solution, and waiting any longer would have been too close to the deadline to make sure the petitions qualify for the upcoming ballot.”
“I’m just trying to stay on a public policy position I’ve had for over a decade.” Paul Bettencourt, Republican state senator from Houston
“What he wants is not a pension resolution. … He’s asking for a re-vote of the mayoral race.”
Sylvester Turner, Houston mayor
Effort called a ‘sham’
Turner said Friday that he had not seen the petition language and knew only what he had read from a statement issued by Houston Police Officers Union president Ray Hunt, who called the effort a “sham.” Hunt detailed how he and other union leaders had recorded paid petition circulators suggesting people could sign for family members who were not present.
The mayor is focused instead on Austin, where a bill to reform Houston’s pension systems appeared to stall this week.
The measure incorporates a plan Turner negotiated with the fire, police and municipal employee pension systems that is aimed at capping skyrocketing pension costs and erasing an $8 billion debt partly caused by the city’s failure to fully fund its share of the retirement plans. The plan would cut benefits, prohibit the city from continuing to underfund the pensions and seeks to eliminate the debt
over 30 years.
Because the pension systems are controlled by state statute, the city must get lawmakers to sign off on the deal.
Houston Republican Sen. Joan Huffman ended weeks of negotiations with city officials, union leaders and conservatives over whether and how to incorporate defined contributions plans by releasing a new draft of the pension bill Wednesday. It said the city and workers could agree to move to a defined contribution plan, but did not require that change.
In response, Sen. Paul Bettencourt, another Houston Republican, said he would propose an amendment to ensure the result of any city charter change to defined contribution plans would be binding. That wording is necessary, he and others said, because some lawyers say amending the city charter alone would be insufficient, since Houston’s pensions are controlled by state statute.
“I’m just trying to stay on a public policy position I’ve had for over a decade,”
Bettencourt said, adding that he is not working with Megaphone or Texans for Local Control and that he already had filed a separate bill mirroring the language of his amendment.
‘That’s a tough vote’
The Houston reform bill had been expected to reach a Senate vote Thursday, but Bettencourt’s amendment created an impasse: some bill supporters, led by the chamber’s Democrats, were unwilling to let the item come to a vote, fearing they lacked the votes to torpedo Bettencourt’s proposal.
“If he brings it up, (Huffman) says she won’t accept it, but she’s going to need about five or six Republicans to go with us to block it,” said Sen. John Whitmire, D-Houston. “That’s a tough vote for them.”
Turner accused Bettencourt of seeking to kill the pension reform proposal for political gain.
“Quite frankly, what he wants is not a pension resolution. It seems like he’s asking for a re-vote of the mayoral race in 2015, and that’s unfortunate because he’s not putting Houston first,” Turner said. Bettencourt in 2015 supported mayoral runner-up Bill King, who has spent months publicly criticizing Turner’s pension reform plan and calling for a switch to defined contribution plans for new city workers.
“I don’t care whether you’re Democrat, Republican, conservative or liberal, what’s in the best interest of Houstonians is the pension reform solution that we’ve put forth that has a strong consensus,” Turner said.
Bettencourt said his stance is about policy, not politics, and said there were votes aligned against Turner’s pension proposal before he started pushing his amendment.
Conservative activists reinforce the partisanship of the issue.
The Kingwood Tea Party, for instance, last week called for an “emphatic no” on Huffman’s latest draft, saying GOP senators who support the measure would be funding the “Houston Democrat Political Machine.” The ultra-conservative Empower Texans group also views the bill as too “union friendly.”
Huffman said she sees no easy fix for the standoff in the Senate, with just five weeks left in the legislative session.
“I’ll continue to try to get something out of here that’s a good bill,” she said, “but it’s going to be kind of a wait and see situation — until we run out of time.”