As you know, 2017 was a special year for Houston. Hurricane Harvey and the Astros made the biggest news, but historic pension reform, which benefits all residents, was also a huge development.
Even during the recovery from Hurricane Harvey, many of you voted in the November election and helped approve the pension reform bonds that play a role in moving Houston forward as we gear up for 2018.
With your votes, we succeeded in overhauling the city’s pension obligations, a task that has eluded the city for past 17 years. With $250 million going to the Houston Municipal Employee Pension System and $750 million going to the Houston Police Officer Pension System, we have stabilized employees’ pensions, reassuring them that we value our workers as much as we value a strong economic future for this city. And we did it without increasing your taxes or taking from city revenues, just as I promised.
The comprehensive reform package will eliminate the $8.2 billion unfunded liability of employee pension systems over 30 years, partly because employees agreed to reductions in their pension benefits in return for assurances that pension funds will remain strong. This was accomplished by sitting down with employee groups and negotiating the details, earning City Council approval (by a 16 to 1 vote) of the reforms and then getting approval of more than two thirds of the state House and state Senate.
The savings have already improved the city’s financial position to a positive $1.9 billion in Fiscal Year 2017 from a negative $95 million in Fiscal Year 2016.
Let me assure you, this historic pension reform benefits all Houstonians. Remember, city of Houston first responders and other employees work tirelessly to serve you. Investing in them is essentially investing in your daily quality of life. At the same time, making this investment reduces the city’s costs, giving the city a greater ability to continue providing the quality basic services all residents deserve.
This is certainly something to celebrate as we ring in the new year.