Mayor Sylvester Turner, a black Democrat and Houston native who served 27 years in the Texas House of Representatives, made solving Houston’s pension problems his top priority upon taking office in January 2016.
He later warned city workers that hundreds of them would be laid off if reforms weren’t made.
The reforms had to go through Austin because state law governs how much the city pays into its municipal worker, police and firefighter pension funds. Gov. Greg Abbott is expected to sign the bill, which is to take effect July 1.
“Houston now has its pension reform, landmark legislation that puts us on a much more stable course. This is historic. This is major. This is just the way Houston does it, and I could not be more proud to be the mayor of this city,” Turner said Wednesday.
Turner spoke from a stage surrounded by dozens of city officials, police and municipal workers.
Absent from the celebration were Houston firefighters, who opposed the reform package because they say their pension fund is only 18 percent of the city’s unfunded liability, but they are being forced to accept 35 to 40 percent of the benefit reductions.
Turner’s package, which he says will eliminate the city’s pension debt in 30 years, calls for $2.8 billion in retirement benefit cuts. It hinges on voter approval in November of $1 billion in pension bonds.
David Keller, chairman of the firefighters’ pension board, warned that passage would be disastrous for retired Houston firefighters.
“If it is passed, our retirees will have to choose whether to eat or buy medicine,” he said in a statement Tuesday.
After the Legislature approved it Wednesday, Keller said that firefighters might seek relief at the courthouse.
“We’re disappointed in the outcome because this is unfair. Obviously, litigation is one of the options we’ll have to explore, along with the 2019 session and any other option that comes forward,” Keller told the Houston Chronicle.
The Legislature meets every odd-numbered year.
Houston’s finances are also suffering from a voter-imposed limit on how much the city can collect in property taxes.
To help balance the city budgets, Turner is banking on voters repealing a 2004 law that caps the city’s property tax revenue at $1.1 billion annually. He said he will put the issue before voters in November.
The city’s pension problems led two credit rating agencies to downgrade Houston last year, and fueled speculation that Houston could become a Southern version of Detroit, which declared bankruptcy in 2013 in the face of mounting pension debt.