This is the second part of a two-part story on Houston’s pension crisis.
Pensions are swallowing the Houston budget.
Take Houston’s legendary dilapidated roads. Houston is spending six times more on pensions than road repairs, and even that’s not enough to cover the minimum payment on its ballooning pension debt.
On its present course, stressed by pensions and other post-retirement benefits, Houston will soon be forced to cut funding for police, firefighters, schools, parks, maybe even some bureaucracy, according to a recent study by the Greater Houston Partnership.
Houston is emulating Chicago, which is now considering a record-high property tax increase due to its pension debt, said Josh McGee, vice president of public accountability at the Laura and John Arnold Foundation.
“Mayor Rahm Emanuel’s plan to raise taxes by more than a half-billion dollars is a warning of what Houston can expect if it continues on its current path,” McGee said.
Officially, Houston has $5.3 billion in unpaid bills and accumulated liabilities for retiree health care. Add in outstanding bonds, subtract assets such as roads that the city’s unlikely to sell, and make a few mild tweaks to the official pension math and you’ve got a city easily $20 billion in the hole.
Yet somehow, Houston firefighters retiring after 30 years get an average of 94 percent of their final salary, plus a one-time payout of between $700,000 and $1 million.