The proposed “Solution” to repair Houston’s failing pension system includes a plan to issue $1 Billion of Pension Obligation Bonds (POBs). Voters will have a chance to approve or to reject the issuance of these bonds on the November 7th ballot.
I plan to vote NO on Proposition A, primarily because issuing the bonds eternalizes a failed pension system. Advocates of the proposed “Solution” seemed to recognize as much when they negotiated the so-called Corridor to hold future contributions to the pension systems within certain limits. The problem is, the Corridor contribution limits (as high as 35%) are unsustainably high. These high contribution levels will be allowed to continue for 5-10 years even if they don’t result in higher actual funding levels relative to pension liabilities. Our pension system needs to be reformed now, not 5 or 10 years from now.
City of Houston Monthly Financial Reports