City’s pension reform plan clears hurdle

Amid opposition from Houston firefighters, House expected to take final vote today

Houston’s pension reform plan is one vote away from the governor’s desk after the final approval of the Texas Senate.

Houston’s pension reform plan is one vote away from the governor’s desk after the final approval of the Texas Senate on Tuesday evening.

The upper chamber gave Mayor Sylvester Turner’s landmark proposal the same 25-5 margin of victory it received three weeks ago when the proposal came to the Senate floor the first time.

The legislation is expected to reach a final vote in the House on Wednesday.

The lower chamber added three amendments friendly to firefighters when it first approved the measure earlier this month, but those provisions were stripped from the bill Sunday night by a conference committee tasked with reconciling the two versions of the legislation, Senate Bill 2190.

Sen. Joan Huffman, the Houston Republican who carried the bill, said the House changes were reversed because they “threatened the financial outlook of the reform plan” and would have cost taxpayers money and burdened the already strained city budget. One of the amendments would have exempted all retired firefighters from benefit cuts, and another could have dialed back the cuts that apply to all firefighters.

“The people of Houston can now be assured that the pension systems will remain solvent in the years to come,” Huffman said after the vote. “They don’t have to worry that police and fire workers will have to be laid off. It’s a good solution for everybody, I think.”

Fire pension chairman David Keller, whose members oppose the reforms, disagreed. He called on the House to reject the “punitive” proposal, and warned his retirees will have to choose between buying food and buying medicine if it passes.

“The House voted overwhelmingly to amend SB 2190 and to make it more fair for firefighters,” Keller said. “With these amendments stripped it is no longer the legislation they approved and sent to conference; it is now back to the unfair legislation it was before and should be defeated.”

The reforms cut more deeply into firefighters’ benefits because they have never taken cuts since benefit increases in 2001 caused the city’s costs to spike, launching Houston’s pension crisis.

By contrast, police agreed to benefit reductions in 2004 and municipal workers accepted cuts in 2004 and 2007; both of those groups back Turner’s reform package.

“Houston is very thankful for the Senate, our author Chairwoman Joan Huffman, and Lt. Governor (Dan) Patrick for their support,” Turner said Tuesday night. “On to the House for the final legislative step to approve the Houston pension solution.”

The mayor’s plan would lower the funds’ investment targets and recalculate the city’s payments, aiming to pay off Houston’s more than $8 billion pension debt within 30 years. The deal also would prevent the city from continuing to short its payments into the funds, which has been a key driver of the crisis.

Turner’s proposal also would cut $2.8 billion in worker benefits, cap the city’s future costs even in the event of a market downturn, and would split a $1 billion infusion of bond proceeds between the underfunded police and municipal plans.

The legislation requires a referendum on the $1 billion in bonds, and a vote is expected this fall.