After a contentious Houston city council Budget Committee hearing over the issuance of $1 billion in pension obligation bonds, Mayor Turner announced via Twitter that the city will proceed with placing the item on the ballot.

The Houston pension reform bill authored by State Sen. Joan Huffman (R-Southside Place) contained a provision requiring public votes on future pension obligation bonds.

There were many questions regarding whether or not the bill provided a loophole that would enable the city to bypass voters and issue the bonds ahead of the effective date of the bill.

Under current law, city councils across the state have the power to issue pension bonds with just a vote of the body for an amount equal to or lesser than their unfunded liabilities.

Up until today, Turner refused to commit to holding off on issuing the bonds until the voter provision took effect. Just this week it seemed as though he may have been considering moving the issue through council, which sparked pushback from Sens. Paul Bettencourt (R-Houston) and Huffman.

Oddly though, twice during the bill’s initial Senate hearing, Huffman was the one who emphasized the fact that Turner shouldn’t oppose the voter provision because he could simply issue them at any time he wanted. She all but encouraged him to do so, however that was during the legislative session and with primary season getting underway rhetoric has changed.

She recently told the Houston Chronicle that the thought of issuing the bonds without voter approval was outrageous and could warrant a lawsuit.

While this is the first public confirmation of movement on a November ballot item for the City of Houston, it isn’t expected to be the last. Turner has stated that he intends to place a vote to repeal the voter-imposed property tax cap on the ballot in November as well.

In addition to that, there is a petition making its way through the city secretary’s office that would require a public vote on 401k pension plans for all public employees.

While the last seems the least likely to end up on the ballot, Houston voters will have hefty issues to tackle in the fall. Asking voters to approve $1 billion in bonds and essentially a tax increase in the form of the tax cap removal is no easy task.

Charles Blain

Charles Blain is the president of Urban Reform and Urban Reform Institute. A native of New Jersey, he is based in Houston and writes on municipal finance and other urban issues.


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