A major plank in Houston Mayor Sylvester Turner’s first-of-its-kind pension reform plan hinges on city council’s approval of $1 billion in pension obligation bonds. But one Houston senator hopes to change the way those types of bonds are approved.

On the first day of bill filing for the upcoming legislative session, State Sen. Paul Bettencourt (R-Houston) filed Senate Bill 151 to require voter approval for the issuance of obligations to pay down municipal pension fund liabilities.

Bettencourt’s bill fixes a problem that was created by the legislature.

In 2003 the legislature passed SB 1696, a bill that allowed municipalities to issue debt in the form of pension obligation bonds to pay down liabilities equal to or lesser than the amount they owe, without any voter input.

That bill has empowered the Houston city council to approve up to $7.7 billion (its current unfunded pension liability) in bonds without the input of voters.

Taxpayers have only had the opportunity to vote on about 11 percent of the city’s roughly $20 billion debt.

Taxpayers already have very little say, other than testifying in council chambers, regarding the pension reform plan they are expected to fund. Allowing them to vote on pension obligation bonds would be a good step in giving taxpayers a seat at the negotiating table.

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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