AUSTIN, Texas – A bill to reform Houston’s nearly $8 billion pension deficit passed the Senate State Affairs Committee Monday by a vote of 7-1, despite objections from firefighters and police.
Firefighters were the most vocal in opposition. Retirees, union officials and firefighter pension board representatives complained the bill makes cuts in benefits much more severe than those that the Houston Firefighters Retirement and Relief Fund board agreed to last October.
Board Chairman David Keller told the committee, “This is a bad deal.”
Retired firefighter Nick Salem told the committee, “We firefighters do not support this bill. Retiree benefits are going to be legislatively reduced if this bill passes."
Sen. Joan Huffman, the committee chairman and author of the bill, said, "It’s clear to me the fire(fighters) will have to be brought along kicking and screaming.”
Houston Mayor Sylvester Turner, who brokered the plan, testified that if the legislature doesn’t approve a pension fix this session, the cost to Houston taxpayers will continue to grow.
Afterward, Turner told reporters that firefighters can’t “have it both ways,” after agreeing to the fix.
“There are some that want change most favorable to them. It's not about what's favorable to them, it's what's in the best interest of the City of Houston,” he said.
The mayor, police and municipal workers object to a provision included by Huffman that requires Houston voters to approve issuing about $1 billion in bonds to pay back police and municipal worker loans to the city from their pension funds.
“We have to balance everyone's interest in this and I believe the taxpayers' interests are as important as anyone,” Huffman said.
There is no legal requirement for the city to seek voter approval, and Turner testified that the bonds will not add new debt, but rather be used to pay back what the city already owes.
Houston Police Officers Association President Ray Hunt says the provision could be a deal-killer for police, saying the inclusion of the provision is “pure politics.”
“In this case, they don’t want local control. They want to make sure the state gets their hand in to tell you what you should be doing. Again, this is pure politics,” Hunt said.
The bill will now go the full Senate for a vote.
A House version of the bill is expected to be out within the week. Sources say the House bill will not include the referendum requirement, but it’s not clear if it will include provisions to satisfy firefighters.