More Of Lee Brown's Legacy: A Billion Dollar Hole For Houston
Let me repeat what I said during the last campaign for mayor: after six years of Lee Pothole Brown, I cannot imagine why anybody would want to be mayor of this city.
The story on the city's underfunded pension plan was hinted at in Kuffner's comments a few days ago, and now the Comical has run the story:
The city of Houston's main pension program has a billion-dollar funding shortfall because benefits have been boosted so high that many employees will earn more in retirement than they received while working, according to a report obtained by the Chronicle. A few will retire as millionaires.There's your legacy, Lee Pothole Brown. And all you Dems who voted three times for the silly b@stard because he didn't have a feared (R) by his name contributed to this problem. Give yourself a pat on the back.To properly reduce the shortfall, taxpayers would have to put nearly $100 million extra into the fund next year, according to an analysis prepared for the pension's board.
Further, the city cannot reduce the benefits for any employee who already has worked five years, thanks to a Texas constitutional amendment passed by voters last fall.
As a result, the city is considering closing the plan to new members and moving new employees into a less generous plan. The only alternatives might be a tax increase or widespread layoffs, city finance officials said.
"I feel so bad for taxpayers," said state Rep. Martha Wong, R-Houston, a former member of both City Council and the pension board who tried to sound an alarm about pension issues while in the Legislature. "Poor (Mayor) Bill White is stuck with it."
White knows he's stuck with the problem and has vowed to fix it. At last week's State of the City address, White was asked how his new job is going so far. He ticked off a list of tasks ahead, including "a billion-dollar mistake" in the city employees' pension fund.
The Houston pension is far more generous in every measurable way than similar-sized cities, including Dallas, Phoenix, Denver and Philadelphia, according to a consultant's report commissioned by the city late last year after the shortfall became apparent.
For example, employees who work 25 years and four months will receive 90 percent of their final salary in retirement, plus Social Security payments that will put them well over 100 percent of their salary. After they die, their spouses will continue to receive the full pension until their deaths.
And a special deferred-retirement program could allow some longtime employees to get million-dollar payouts in addition to their monthly benefits.
Mayor Lee Brown's administration approved the bulk of the extra benefits in 2001, despite a state board's warning that the changes would be costly.
The city did not conduct its own analysis of the proposed benefits. Instead, it relied on a cost report prepared by the firm that does work for the city's independent pension boards, all of which are controlled by employees and retirees.
As an aside, this is almost the same political strategy employed by Gray Davis in California: pay off your key political constituency in exchange for their support, and to hell with the fiscal consequences. At least in California, though, the voters finally had the sense to recall the fool. In Houston, Dems just kept re-electing ours. Again, nice job.
What is even more galling is the city has irresponsibly boosted its pension plan at a time when private industry has moved away from defined-benefit plans to 401k plans, for obvious reasons. Mayor White, who has managed a large business, understands this:
In an interview, White said the city could not afford to keep the current pension system and would be forced to make changes. New employees might get a "defined contribution" like a 401(k) plan rather than a "defined benefit" like a standard pension, he said.Unlike Lee Brown. One more time -- thanks, Dems, for electing that fool three times so he could do unbelievable damage to our city.White said he "can't rewrite history" and hadn't determined who was at fault. But when asked about the city's reliance on the pension fund's expert rather than hiring one beholden to the city, he said: "In my administration, I'll make sure we do have second opinions. Period."
"I personally will familiarize myself with the actuarial assumptions. I, the person who runs the city, will not rely on secondhand information," White said.
Posted by Kevin Whited @ 02/29/04 10:51 | Houston | Technorati
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Sunday, the Comical reported on Lee Pothole Brown's gift of a billion dollar pension liability to the city of Houston.
Now, it turns out that it's probably closer to $1.5 billion.
There's your le...
[Linked on 03/01/04 by PubliusTX Weblog]
The Comical weighs in on the city's pension scandal on the editorial page today.
It's not surprising that the city of Houston's pension fund shortfall may be as much as $1.5 billion over the next ...
[Linked on 03/04/04 by PubliusTX Weblog]
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