City Hall

This Is What Dallas Pension Fund Mess Looks Like to Legislature About Now

Dallas cops and firemen voted last month to reject a package to fix their pension fund. The mayor of Dallas is suing the pension fund, and he has called for a criminal investigation. If you're the state Legislature looking in on this mess, this is about what it looks like.
Dallas cops and firemen voted last month to reject a package to fix their pension fund. The mayor of Dallas is suing the pension fund, and he has called for a criminal investigation. If you're the state Legislature looking in on this mess, this is about what it looks like. Flydime, via Wikipedia Commons
Fine. Any day now Dallas is going to go hat-in-hand down to the Texas Legislature, that famous factory of therapeutic thinking, and ask it to cure the city’s police and fire pension problems. Me, I’d just as soon walk into the bus station and ask if anybody could help me count my money, but then it’s not my say-so, is it? So down to Austin we go, heigh-ho.

It’s worth remembering on our way down there that as a Texas city hard-pressed by public pension problems, we are not the Lone Ranger. In fact, while we’re cooling our boot-heels waiting to speak to the therapeutic thinking committee, we might want to gaze around the corridor and see who else is hanging out.

Oh, look there! I believe that’s Houston. Houston has been preparing to take its pension problems to Austin even longer than we have, and at first glance, Houston’s issues look much worse.

A study by the Kinder Institute for Urban Research, a think tank housed at Rice University, found that Houston’s three pension systems had a total unfunded liability of $7.8 billion. Comparing that to our own unfunded liabilities in Dallas is a bit of an apples/oranges problem, because we haven’t been lumping our civilian employees pension fund in with the two uniform funds, police and fire, in talking about shortfalls. But if we did, our total unfunded liabilities would be about $5.92 billion.

I get that number by taking the unfunded liability amount described in the mayor’s lawsuit against the police and fire pension fund, $3.77 billion, and adding it to the unfunded liability amount for our civilian fund, $2.15 billion. We took care of the civilian fund in November by voting to approve a reform package, but – stick with me – I’m just making a point: total liabilities in Houston are substantially higher than ours. We have to fill a $3.77 billion hole. Houston must fill a $7.8 billion hole.

So the therapeutic thinking committee should be happy to see us, right? We have way less of a problem. Heck, they could fix two of us for one of Houston.

No. Wrong. Houston doesn’t have a problem. In Houston, Mayor Sylvester Turner, an experienced politician, has crafted a fix for the city’s pension funds that looks as if it won’t cost Austin a nickel. Houston is taking total responsibility for its own issues, fixing its own pension funds, and people at Houston City Hall are not suing each other or calling the cops on the cops the way they are at Dallas City Hall. We’re the ones with a City Hall process that looks like Sarah Palin’s family picnic, while the process in Houston so far, by comparison, looks like church.

Under the Turner deal in Houston, the unions have agreed to take a haircut on pension benefits that will amount to $2.6 billion or exactly a third of the unfunded liability. Turner has agreed to back a special bond election to produce a $1 billion cash infusion for the fund. That will take Houston’s total unfunded liability down to $4.2 billion, which the city says it can get rid of over 30 years within the amount it spends now to maintain the fund.

You will recall that Dallas police and fire officers rejected a similar haircut deal in a union election last month. But that was in the context of the mayor suing them over lump sum withdrawals. The vote to reject the deal also came after the mayor, speaking to the State Pension Review Board in Austin, said the idea that Dallas City Hall should kick in $1.1. billion to help fix its own pension mess was a “ridiculous suggestion.”

OK, wait. Let’s not get lost in the numbers just yet. I want you to look at something here. We’re going back down to Austin again about this any day now, right? The mayor or a city lobbyist or somebody representing Dallas will be back down there cooling his heels waiting to tell somebody important that Austin needs to fix our pension problem.

At the same time, probably cooling his heels outside the same committee room door, will be somebody from Houston. Because city pension funds fall under state authority in Texas, both Dallas and Houston will ask the Legislature to make the sign of the cross over their pension repair deals.

The amount Houston must kick in by itself to fix its problems is $1 billion. The amount Dallas would have to kick in is $1.1 billion.

So let’s say it’s Rawlings and Turner representing their cities, and Turner gets to go first because his city is bigger. He puts his deal on the table, tells the committee his city is on the hook for $1 billion, tells them it’s taken care of, maybe shows them the note for the bond issue, tells them they don’t have to put in a nickel, and asks them to sign off at the bottom of the last page.

Scratch, scratch, scratch. Signed, sealed and delivered. “Next!”

Rawlings goes in, puts his deal on the table, tells them he’s suing his own cops and firemen, plus he sicc’d the Texas Rangers on them, plus they got pissed and rejected a compromise, plus he needs the committee to give him a check for a billion dollars … please.

See what I mean?

click to enlarge Houston Mayor Sylvester Turner - HOUSTONTX.GOV
Houston Mayor Sylvester Turner
In this world, you don’t just ask for a billion dollars in a vacuum. It turns out that lots of people would like a billion dollars. I personally would accept much less than that. If Rawlings succeeds in getting that billion, I’m going to down there and find that same committee and ask for $100. My argument will be that it’s not that much.

To be halfway serious about this, I can’t imagine how Dallas could even allow itself to get into its current situation knowing what kind of compromise package has been put together by Houston, the city’s closest peer and competitor. It’s an example of a peculiar persistent disinclination on the part of the city’s old leadership to look beyond the city walls for guidance and context.

Another thing. Turner is that thing so dreaded and despised by the old Dallas elite, that creature that must be resisted, rejected and guarded against at all cost – the career politician. Before becoming mayor he spent 27 years in the Legislature, where he was a member of the Legislative Budget Board, vice chairman of the House Appropriations Committee, chairman of the House State Affairs Committee and chairman of the General Government Subcommittee.

Somewhere in there, Turner obviously learned how to get things done, how to call people to the table, bring them to a common vision and help them craft the kind of meaningful compromise that must be at the heart of any significant political solution. In other words, he’s good at politics, and he got good at it by being a career politician. Who at Dallas City Hall is going to do all of that for us?

It’s ridiculous to think that we got into this mess because a bunch of bad guys tricked us or broke the law, and it’s really obscene to try to assign that role to the cops and firefighters who risk their lives every night and day keeping us alive and safe.

We got here the same way Houston did. We screwed up. We made some mistakes. The whole question now is how we fix it. And that will require real political wisdom and true political leadership, not bully-pulpit posturing.

I guess there’s always the chance I’m just wrong about Austin and somebody down there will shrug and say, “Yeah, what the hell, give Rawlings his billion. It won’t break us.” But if that does happen, I’ll tell you what: I’m going to change my mind and ask for a full $200 for myself.
KEEP THE DALLAS OBSERVER FREE... Since we started the Dallas Observer, it has been defined as the free, independent voice of Dallas, and we'd like to keep it that way. With local media under siege, it's more important than ever for us to rally support behind funding our local journalism. You can help by participating in our "I Support" program, allowing us to keep offering readers access to our incisive coverage of local news, food and culture with no paywalls.
Jim Schutze has been the city columnist for the Dallas Observer since 1998. He has been a recipient of the Association of Alternative Newsweeklies’ national award for best commentary and Lincoln University’s national Unity Award for writing on civil rights and racial issues. In 2011 he was admitted to the Texas Institute of Letters.
Contact: Jim Schutze