AUSTIN, Texas (AP/FOX 26) - The Texas House has approved a bill potentially cutting billions in future costs from Houston's cash-strapped police and firefighter pension plans - but only after adding a contentious change that may ultimately kill the proposal.
Plagued by investments that didn't meet high return expectations, Houston is facing about $8.1 billion in unfunded pension liabilities.
Approved Monday 112-28, the bill decreases plan benefits and lowers future investment yield targets. But the House also allowed fire fighter groups more time to calculate their pension costs.
Dozens of fire fighters watching from the gallery cheered, but that's different from a proposal that already cleared the Senate and now must be reconciled before the legislative session ends May 29.
The bill's sponsor, Rep. Dan Flynn, said the move "could very well derail the bill."
No pension reform bill for Houston has passed either the Texas House or Senate in 16 years.
While police and municipal employees have given their blessings, that’s not the case with Houston firefighters.
“It’s a major day. It’s a historic day and a major step in the city of Houston getting its financial house in order,” said Houston Mayor Sylvester Turner.
Turner couldn’t hide his excitement after the Texas House of Representatives approved Senate Bill 2190, the Houston Pension Solution on a 112 to 28 vote. Last week the Senate passed it 25 to 5.
“The amendment process is now done. Both chambers have spoken very favorably by two-thirds on each and so after it goes to a conference committee they will reconcile the two then it will go back to both chambers then it will be on its way to the Governor’s office,” Turner said.
The Houston Pension Solution has been touted as a national model that will immediately reduce the city’s $8.2 billion unfunded liability through future benefit reductions.
“For the first time in the history of this city there’s a pension solution bill that has navigated through the Senate, navigated through the House, and now it’s on its way to a conference committee where the differences will be resolved,” said the Mayor.
While police and city employees are on board that’s not been the case with Houston firefighters who feel shafted by the Houston Pension Reform Bill.
“The firefighter Relief Retirement Fund only accounts for 18 percent of the unfunded liability of the city and yet they have been called on to sacrifice ‘shared’ sacrifice of 35 to 40 percent of the cuts,” said Joe Gimenez, a spokesman for the Fund.
There’s still the possibility the pension reform bill would have to be approved by voters.
But Turner says he’s confident voters would give it the thumbs up to ensure the city’s financial stability and no more talk of layoffs.