House tweak to Houston pension bill could buy firefighters' fund more time

The Texas House gave early approval Monday to a bill that would reform Houston's three problematic pension funds, which have caused financial woes and spurred political battles for years.

The 112-28 vote for Senate Bill 2190 came after lawmakers made some key changes to the bill, including a provision that could let the firefighter pension fund bear a smaller burden for shoring up billions in shortfalls.

But State Rep. Dan Flynn, R-Canton, who authored the House version of the bill, worried that the Senate may not like the changes. 

"This is an amendment that could very well derail the bill," Flynn said Monday from the House floor.

Meanwhile, firefighters who could benefit from one of the amendments remained cautious after the bill's preliminary vote.

"We have to see how the rest of the process unfolds," said David Keller, chairman of the Houston firefighter pension fund.

SB 2190 would cut some retiree benefit features, increase some employee contributions to funds, and infuse the police and City Hall employee funds with $1 billion, which the city plans to finance through bonds.

Firefighters opposed the bill, which still needs a final vote in the House, because it cuts some of their retirement benefits more than they anticipated when their fund is not in nearly as bad of shape as the police and municipal funds. City officials, though, said firefighter benefits were more generous than police and municipal benefits and were too costly to taxpayers. (Update, May 9: The House gave the measure final approval Tuesday on a 115-29 vote.)

State Rep. Dan Huberty, R-Houston, successfully got his House colleagues to amend the bill so that the firefighter pension fund has an opportunity to lower what its members give up in order to help close a large funding gap.

For months, city and state leaders have accused the firefighter pension fund of withholding actuarial data that would prove it could shore up its shortfall with fewer cuts to members' benefit features. In the absence of such data, city leaders and state lawmakers put together SB 2190 and a House companion — authored by Flynn — that the firefighters opposed.

Keller said the retirement system wants to protect individual members' information and has offered the city data under licensing agreements that included confidentiality provisions. He said he was surprised that became an issue on the House floor considering all firefighter salary information goes through City Hall.

"They know what each of us makes," he said. "There’s nothing surprising in our data we hold."

Huberty's amendment will give the firefighter fund a deadline to provide the data to the city. It passed 90-42 over the objections of Flynn, who said the firefighter fund had months to help reach a compromise and that such a change could sink the bill when it goes back to the Senate. 

"At this point it's really too late to change the critical aspects of this bill," Flynn said.

When the amendment passed, applause broke out from the House gallery above, where scores of Houston first responders had gathered to watch the vote. 

"I've presented many bills this session, and I've never said it's too late," Huberty said. 

Flynn's companion bill was slated to be voted on by the full House on Monday. Instead, Flynn put forward the Senate version, which includes provisions requiring future employees to be switched to a different kind of retirement system if the current funds’ shortfalls exceed certain thresholds in the future.

Houston Mayor Sylvester Turner and the city’s police and fire chiefs had warned of first responder shortages if legislation overhauling the pension funds didn’t pass this session. Lawmakers supporting SB 2190 said several times Monday that if a bill didn't come from the Legislature, the pension funds would fail. 

State Rep. Dwayne Bohac, R-Houston, also successfully amended the bill to prevent changes in the bill from affecting current retirees. And state Rep. Mike Schofield, R-Katy, tacked on an amendment that would nullify benefit cuts the pension funds agreed to if Houston voters don't sign off on a plan to infuse the police and municipal retirement funds with $1 billion in pension obligation bonds.

Flynn opposed Schofield's amendment, saying it could have unintended consequences. Yet he almost immediately allowed it to be added onto the bill.

"I'm going to go ahead and accept it at this time and we'll deal with it later," he said. 

After the vote, Flynn said it was "good news" that the majority of his House colleagues want to fix the pension systems. But he also wished some of the changes hadn't been made. He called Huberty's amendment a "campaign speech" and again criticized firefighter pension board members.

"They’ve refused to negotiate," Flynn said. "They’ve never worked with us in good faith."

Keller said Monday that he didn't know whether the firefighter pension board would vote to release the data referenced in the amendment.

"We’re still working on that," he said. "I’m just one vote on the board, and the rest of the board will have to have that discussion."

Read related coverage:

• Amid efforts by the Legislature to address immediate pension crises in Houston and Dallas, some see an opportunity to push for a sea change in how cities fund pensions. Critics predict such a move could drive first responders away in droves.
• Hundreds of Dallas police officers stood at City Hall last week to oppose Mayor Mike Rawlings' calls for residents to oppose a legislative fix to the rapidly failing first responder pension fund.
• As the Texas Legislature considers bills aimed at fixing the Houston and Dallas pension problems, several of its members have personal or business ties to those cities' pension systems.