Reducing DART to Fix Pension Fund Is Better Than Having No Cops or Firefighters
Illustration by 355A
Taking money out of mass transit to save the city’s dying police and fire pension fund is not a fun idea. It’s nothing to look forward to. But we have to do something, and whatever we do probably won’t taste sweet.
“The pension crisis is a public safety crisis now,” City Council member Scott Griggs said to me at the end of last week. “I hear from constituents and business owners every day about the high response time and how crime is going. It’s because we don’t have enough officers. Right now the city is doing an all-out push to get as many people as they can into the police academy. You can see in the numbers that they are not reaching their expectations.
“When I got on the council in 2011, we had 2.94 officers for every thousand residents,” Griggs continues. “Our stated goal was three per thousand. We’re now down to 2.5 officers per thousand. We have 600 fewer officers than we should.
“The pay is low. They don’t have Social Security. And now it looks like they don’t have a pension. And you’re asking them to do one of the hardest jobs and put their lives on the line.”
I have been hearing from many police and fire officers myself, writing to say they agree with a particular point I made in a column a while ago. It wasn’t about high finance or investment decisions. But it must ring true.
I said I suspected most police officers and firefighters who come to work for the city of Dallas probably sign up for the pension fund and then forget about it. That’s how I do it.
All those annual statements go into recycling, usually still in the envelope. Sorry. I have a job, a family, and I have to fix my own water-heater, which I definitely do not know how to do without possibly blowing us all up. I don’t have time to be a wizard of Wall Street. Most of us middle class and working class people trust our leadership on things like that. So shoot us.
Griggs thinks the approach of the mayor and the business elite he represents is both reprehensible and absurd. It’s reprehensible because it would claw back the pension fund’s deplorable deficits almost entirely from pensioners and their families. And it’s crazy, because, if you treat cops and firefighters that way, pretty soon you won’t have any cops or firefighters still working for you.
“The mayor wants to take a pound of flesh from innocent police and firefighters, their families and these officers in retirement who have already served 40 years,” Griggs said.
“The Legislature isn’t not going to let that happen. The mayor may want to do it, but the Legislature is in the way. The council is in the way. Even the courts are in the way. Can you imagine how many decades the litigation would go on?
“We need a billion dollars [to bail out the pension fund]. The mayor thinks with aggressive tactics, with litigation and garnishment, they can get $750,000 in a best-case scenario. It’s almost a full claw-back.”
Griggs has authored a draft resolution that would take one-eighth of the local sales tax money that the city gives every year to DART, the regional mass transit agency, and steer it instead to bailing out the ailing pension fund. Dallas kicks in about $260 million a year to DART, so a one-eighth cut would deliver about $32 million a year to the pension fund.
Fort Worth splits its local sales tax down the middle — half to transit and half to law enforcement — so Griggs’ proposed formula of only one-eighth to law enforcement, the rest to transit, is still vastly more generous to transit than what Fort Worth does.
But even this minor a reduction was barely out of Griggs’ mouth when DART spokesman Morgan Lyons began scraping away on his street-corner violin, telling The Dallas Morning News sorrowfully that Griggs’ idea would be “potentially devastating for transit operations.”
Joe Pappalardo/Observer 1
Indeed, Dallas is important to DART. Between 1983 and 2015 Dallas provided DART with $5.2 billion in local sales tax money — 54 percent of DART’s total wealth in that period. But notice this: In all that time, DART has been interested mainly in keeping its suburban member cities happy, not Dallas.
For that reason, DART has spent vast sums building a light rail system flung out over the raw-land suburban moonscape like silly string, designed mainly to promote suburban sprawl. That’s exactly the opposite of what the city has needed all along — a fast underground heavy rail system to enable car-free living downtown.
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I bet I know what is really feared by DART and the public works construction industry lobbyists. They’re afraid the Griggs proposal could be the first inkling of Dallas awakening up from its political torpor and beginning to see how DART works against the city’s interests.
Hey. Let’s say we quit DART altogether. In fact what if we had never joined? What kind of bus system could we have by now for $5.2 billion? I’d be willing to give up light rail, heavy rail and any kind of rail if I could just find a damn bus, you know, like a bus that actually goes somewhere instead of veering off after two blocks into an endless magical mystery tour?
Griggs told me he doesn’t love the idea of taking money from DART. But he said nobody else has come up with a plan that works or doesn’t gouge widows and orphans. He said the legislative plan on the table — the one from Austin — has a $450 to $600 million hole in it, even though it assumes the pension plan will earn 7.25 percent on investments every year for the next 40 years.
Griggs, who is on the board of trustees of the pension fund, calls the 7.25 percent earnings assumption, “completely unrealistic.”
He said: “The fund this year will be lucky to get to zero. We’re looking at negative [earnings] this year. So where else do we get the money?
“Rawlings’ idea,” he said, “is to go garnish retirees’ pension checks and go back and sue retirees, orphans and widows.
“We need another funding source. If people don’t like the DART option — I don’t want to do it — but then give me another option that provides for public safety and averts the city’s bond rating going to junk status.”
The mayor strongly denies Griggs’ characterization. “I would never sue those individuals,” he said in response to a question about trying to recover money from retirees or their families. But he said all parties must make sacrifices:
“As we’ve said from the very beginning, all parties will have to share in the pain as we meet this challenge. That means police and fire retirees and senior officers and firefighters, our younger officers and firefighters and taxpayers.”
He calls the Griggs plan to use DART money, “cutting off the nose to spite the face.” He said, “Such a move would be particularly devastating to our poorest and most vulnerable neighborhoods, including much of southern Dallas.”
As far as I can tell, Griggs is completely agnostic on fault for the current pension crisis. He doesn’t like the DART option, calling it “an unfair choice.” But he likes it better than what the mayor is proposing.
“It took us decades to get here, and there is plenty of blame to go around. There is blame to go around to [former pension fund director] Richard Tettamant. There is blame to go around on previous boards of trustees. The members there were terrible.
“There’s blame to go around on previous city councils and mayors — council members for not attending meetings, previous mayors for not exercising the right of audit. There is so much blame to go around, but we are where we are. Right now, we have to fix this.”
Later this week, I want to talk to you about one aspect of what Griggs has said here in his mention of audits, the absence thereof. Last week a team of suits from the office of the General Counsel of the U.S. Department of Housing and Urban Development spent the entire week crawling all over City Hall, looking for missing documentation for what potentially may be hundreds of millions of dollars in federal expenditures made by the city over a period of years. If Dallas can’t prove up that money — and it has not been able to so far — the city could be on the hook to pay it back to HUD.
Oh, great, just what we need. Yet another billion dollars bill to pay.
The absence of audits at Dallas City Hall is not a merely occasional problem. It is an ingrained culture. City Hall doesn’t count the money. It never has. All of the financial problems whirling around it now have to do with that culture.
In the meantime, Griggs is offering us some bitter medicine but maybe a way to begin to get better. Does he need to put it on a spoon, wave it around in front of our mouths and tell us it’s an airplane? I’ll suggest it to him.
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