HOUSTON – Dozens of city employees rallied outside City Hall Tuesday to keep their current pension system, as a new task force report out this week suggested broad changes.
"The middle class is not the one they should be cutting,” said Melvin Hughes, the president of Houston Organization of Public Employees, or HOPE. “You need to work with the middle class because we helped build this city."
Last year, the City Council voted to create the Long-Range Financial Management Task Force. Over the past few months, the 16-member group has brainstormed ways to save or raise hundreds of millions of dollars for Houston city government. On Wednesday, the group’s chairman is expected to present the report to council members.
The mayor’s office is quick to point out that the task force is just presenting ideas that may or may not be implemented. Indeed, the city doesn’t even have the power to enact some of the suggestions – including pension reform.
But some civic leaders, like Houston lawyer and newspaper columnist Bill King, are urging state lawmakers to take up the issue during next year’s legislative session.
In a Houston Chronicle op-ed this weekend, King wrote that pension costs have more than doubled over the past decade and will continue to skyrocket through 2020. At that time, he wrote, those costs would represent half of the city's property tax collections.
"That math just doesn't work," King told KHOU 11 News this week. "Younger people in this system right now are absolutely being promised benefits that they'll never be paid because the city can't afford them."
One of the ideas outlined in the task force report is switching from traditional guaranteed pensions to 401(k)-type plans. That move would likely raise the retirement age and cost workers more.
Public employees at the rally Tuesday strongly opposed the idea.
"We don't need a change this far in the game," said Marilyn Owens, a city employee in the human resources department for 24 years.
Many workers worried they’d be forced to get a part-time job after decades of service.
"To me, there was a time where people could retire from a municipal or government job or anywhere and still have a couple years where they didn't have to work," said Eddie Mercado, who works in the city’s aviation department.
Several members of the task force, including Barbara Chelette, disagreed with the rest of the group’s suggestion.
"The Task Force spent most of its time focused on the pension systems, which are tightly regulated, professionally managed and have already taken numerous steps to secure their long-term viability," Chelette said in a news release. “We should have concentrated on the city’s overall fiscal management and local governance issues that led to $13.1 billion in debt.”
Chelette and other task force members issued their own, separate recommendations:
• Taking advantage of historically low interest rates to restructure City debt;
• Reviewing all TIRZ and Management Districts to ensure they are providing a real benefit to City taxpayers;
• Analyzing the new Drainage Fee structure to increase transparency and potentially free up dollars for the General Fund; and
• Pursuing a long-term economic growth strategy for the City that recognizes the necessity of effective and efficient City services to support growth.
One of the other ideas outlined in the task force report is raising property taxes – but that seems unlikely given the city’s political climate.
