In re Pensions

An editorial by the Houston Chronicle published over the weekend touched upon this topic, and a Mike Morris article on the front page of the Chronicle‘s City & State section on Sunday expanded upon the topic. Municipal pensions.

The argument is somewhat straight-forward. Our liabilities on the Municipal, Police & Fire (all distinct) pension funds all drastically outweigh our funds to cover them. However, there are some straight-forward goals that are easily attainable to solve these issues. All too often, though, the term “pension reform” is a clever euphemism for giving the shaft to public employers. Yet another way to pull a massive scam over the heads of the working person in the name of fiscal responsibility.

Parker’s ideas, which I mostly agree with, are to end the generous cost-of-living adjustments for the workers, as well as give the option to for employees convert to a “defined contribution” plan, which is a fancy euphemism for privatization, since George W. Bush ruined the reputation of that word vis-a-vis retirees. The “defined benefit” plan, or the status quo (actual) pension, would continue for all those who want it, albeit in less generous amounts, under Parker’s plan.

Hall, meanwhile, wants to force all employees hired after 2008 off the road and into the privatized 401k plans. What all this means for Hall’s cozy relationship with the Firefighter’s is somewhat unclear. The Fire pension is the best funded because of special State control that mandates extremely generous contributions from the City of Houston. It is the small bites of Parker’s that led to the exceedingly acrimonious relationship in the first place.

When asked about Hall’s plans, Todd Clark, representative of the Fire fund, dodged the question, but took immediate aim at the lesser demands of the Mayor. Clark went on to disparage both the end of cost-of-living-adjustments (COLA) and the mere option of the 401k plans. From the Chronicle article, Clark’s quote:

“Working as a Houston firefighter is a long-term career. We strongly believe (defined contribution) plans do not provide an adequate retirement after serving three-plus decades protecting the citizens of Houston. The defined benefit that is in place is in the best interest of the Houston firefighters.”

Parker seemed somewhat confident that the COLA could pass through the City Council, but was more ambivalent on the question of the partial privatizations.

Finally, Chalres Kuffner at Off the Kuff has some brilliant commentary on this topic. We largely agree on this issue, believing that pension reform is often a thinly-veiled euphemism for disparaging working people. Oh, and that’s the position of the Texas Observer as well. Back to Kuffner for the close:

Thank God, Bill King finally has a Mayoral candidate he can support. I just wonder if this is what the firefighters thought they were getting when they endorsed Hall. But like Mayor Parker, this is where I get off. Because let’s be clear on something, pension plans generate vastly superior returns than 401K plans. High income workers in the private sector may do better with 401Ks than they would with pension plans, but lower income workers and public employees do better with defined benefit plans. Employers may do better under 401Ks, but that’s because they get to contribute less. Of course, that comes out of the hides of the employees. Not a bad deal for the Bill Kings of the world, who somehow never call upon themselves to make sacrifices for the greater good, but not so good for the affected employees.

Finally, the conflation of the police and firefighters’ pension funds just serves to muddle what the issues actually are. The city’s complaint about the firefighters’ pension fund is that they don’t have any say over how much they have to contribute to it each year. (Perhaps not coincidentally, the firefighters’ pension fund is also one of the best funded in the state.) The city would also like to negotiate over and try to wring some concessions on things like the deferred retirement option (DROP) and automatic cost of living adjustments (COLAs). The city has already gotten most if not all of the concession it sought from the police and municipal employees’ pensions, and if you listen to my interview with CM Costello, you’ll hear him say that the city has largely solved its long-term problems with these pension funds. There are issues in the short to medium term, resulting in no small part from the city’s underpayments to those funds in recent years, but once we’re past that the system is sustainable. Mayor Parker will tell you that if the city can negotiate changes to DROP and get some discretion on COLAs, it will have a handle on the firefighter’ pension fund. Whether you agree with that or you agree with the firefighters, the point is that replacing pensions with 401Ks is hardly necessary. Making bogus comparisons to Oakland or Detroit isn’t helpful.

 

HOPE endorses Parker

Ok, the “phony scandal” is officially dead.

The Houston Chronicle reports that HOPE, the Houston Organization of Public Employees (the municipal employee union covering all those city servants outside of HPD and HFD), has endorsed Annise Parker for re-election. This is a huge endorsement, as her main opponent, Ben Hall, had previously tried to make an issue out of her alleged tepid support for municipal workers.

Longtime followers of Municipal politics will remember that HOPE –which typically endorses exclusively Democratic candidates– supported Annise Parker in 2009. From what I understand, the union declined to endorse anyone in 2011, simply opting to make selections in City Council elections. I have left a message with HOPE to confirm this fact, however.

The union also endorsed other candidates this afternoon, including Ronald Green, Stephen Costello, Andrew Burks, Roland Chavez, C.O. Bradford, Jerry Davis, Ed Gonzalez, Mike Laster and Larry Green. Accordingly, they opted to not make selections in AL5, as well as Districts A, D, F, G and I. Ellen Cohen and Dave Martin were specifically snubbed from getting a nod, despite running unopposed.

The endorsement is –and I will say this multiple times– is a huge blow for Hall’s campaign. Hall had been walking a fine line, attempting to run simultaneously to the left and to the right of Parker. While he espoused many somewhat fiscally conservative ideas that made him a big hit at the Pachyderm Club, the real prize would be going after those on the left –specifically the unions– by cozying up to the Firefighter’s Union, followed by HOPE. That is why Hall’s response to the ‘phony scandal’ could have mattered so much more.

Without the monolithic support of the unions, Hall is left in a delicate, dangerous position. At this point, he is getting perilously close to his core supporters: Establishment Republicans, prominent African-Americans and the Firefighters. That doesn’t really make up more than about a quarter of the electorate, especially once you factor in how many African-Americans will vote for Parker. I tend to believe that number has been underestimated thus far. Any move to go further right (and therefore snatch votes from Dick) would alienate his African-American base even more.

Hall now faces a daunting task, while Parker’s job keeps getting easier. No longer will Hall be able to bring up “the 747” [laid off workers], for the Mayor has atoned, and been forgiven, for the move. The Mayor’s opponent will need to find another card to bring to the table.

‘Phony Scandal’ picked up by Chronicle

Ok, perhaps I should stop calling it that.

Mike Morris at the Houston Chronicle wrote the cover story this morning about the Mayor’s allegedly unethical pay raises given to senior staffers in her first few years of office. As the astute will recall, KRIV had been drumming up this issue about three weeks ago, as I noted on three occasions.

The KRIV story alleged that these pay hikes occurred between 2009 and 2011. Of course, Annise Parker did not become Mayor until January 2010. I attempted to bring this to the attention of KRIV, thinking they may have made an honest mistake, but was rebuffed as they doubled down on the story. At that point, I dismissed the “phony scandal” as being untrue, because if the only two years compared were 2009 and 2011, it is comparison of salaries in the City Controller’s office and Mayor’s office, respectively.

However, Morris’ articles notes this, as the Chronicle does the due diligence required, and notes the differences between 2010 and the present. Raises still occurred, but they were far less severe than KRIV had insinuated.

For example, KRIV alleges that Parker’s Communications Director received a 68% raise, while the Chronicle places the number at 31%. Similarly, KRIV alleges a whopping 147% raise for Parker’s Finance Director, while Morris thinks 29% is a more accurate salary bump.

In fact, besides Waynette Chan, the Mayor’s Chief of Staff, who both KRIV and the Chronicle place the alleged pay hike at 46% for, the Chronicle notes that most of these hikes were not all that extravagant, especially for senior staff.

Further, Morris goes on to note how, as Houston left the recession, most City workers received modest, but noteworthy, pay raises. It is also worth noting that the furloughs have long since ended, and that many –if not most– of the laid off workers have been rehired by the City. As Morris goes on:

City payroll data show that during Parker’s tenure, 22,357 city workers got at least one contractual raise. Those raises averaged 5 percent, with the amounts varying between the municipal, fire and police unions. For the 12,993 employees who also received a salary adjustment, promotion or merit raise – or some combination of those – the average overall raise was 11 percent.

Morris then goes on to note that both Ben Hall and the Firefighter’s Union, both with a vested interest to take down Parker by any means necessary, harshly criticized the Mayor for this issue. However, as the Chronicle continued in its pattern of due diligence for the day, Morris talks to all the other stakeholders in the matter, including the HPD Union, HOPE, the local AFL-CIO, as well as both prominent Democratic and Republican consultants:

Ray Hunt, president of the Houston Police Officers Union, which has endorsed Parker, said the mayor’s staff salaries give him no heartburn.

“Anybody who got laid off during that year, I’m sure they’re very, very upset about it, and understandably so, but when you have a downturn in the economy and you’re trying to turn things around, you better keep your key people in those positions and you’re going to have to compensate them what you believe they’re worth,” Hunt said. “I personally am not concerned about the salaries of the top administrators in the city of Houston. I don’t think any of them are out of line with the private sector.”

Melvin Hughes, head of the municipal employees union, declined comment.

Richard Shaw, of the Harris County AFL-CIO, said the raises do not disturb him because the mayor now negotiates pay agreements with all three unions.

“As far as I’m concerned, she bargains in good faith with all employee groups and, from a labor standpoint, that’s what we ask for,” Shaw said. “The firefighters need to quit whining. They didn’t take any hits on layoffs. They negotiated that pay agreement with the mayor.”

GOP communications consultant Jim McGrath said the issue will be little more than water-cooler fodder at City Hall unless Hall can show a pattern of such decisions.

“Taxpayers and voters care about their well-being and their future and if the mayor has failed in some regard as it relates to that, that’s something you can get traction with,” McGrath said. “This inside baseball stuff will not fundamentally alter the dynamics of a race that isn’t looking good for Mr. Hall at present.”

Democratic political consultant Mustafa Tameez agreed: “This is not going to be seen well by the public, but something like this doesn’t make or break the election.”

As far as I’m concerned, I agree with them. I worked at City Hall amid all of the layoffs and the furloughs, and probably would be legitimately angered if the Mayor was indeed awarding these extravagant raises, but she wasn’t.

The average City Employee took in about an 11% raise. Of the 11 members of Parker’s ‘senior staff’ mentioned by Morris, five receive pay hikes over 11%, while six receive hikes equal or below 11%. There really isn’t a scandal here, and Morris & the Chronicle did a really good job at explaining why–right down to the headline.

Now that a reputable source has repudiated KRIV’s story, I wonder what Greg Groogan’s –the “journalist” who published this nonsense at KRIV to begin with– next move will be. I wonder if he’ll keep doubling down on it.

More on the Phony Scandal

KRIV continues with its lazy, stupid, phony scandal. As I have noted twice now, until KRIV brings up some more evidence, which they have still yet to do, they have given absolutely no proof of any, not only wrongdoing, but amoral behavior, on the part of the Mayor of her administration.

One last time, I am going to run through what this entire mess entails. About a week ago, the local Fox-affiliate reported on what they deemed to be “unethical pay raises at City Hall.” At first, it seemed like the perceived scandal could have legs, but that was simply not the case.

The entire meat of the phony scandal rests upon the idea that many members of Parker’s staff received tremendous salary increases between 2009 in 2011. However, as I wrote at the time, this is hugely misleading, as Annise Parker did not become Mayor until 2010. Accordingly, whatever positions these respective individuals held at the time was not with the Mayor’s office, it was with the Controller’s office, assuming they still worked for Parker herself. It makes a great deal of sense that the Mayor’s Chief of Staff receives a higher salary than the City Controller’s Chief of Staff.

However, the entire spectacle was picked up by Channel 5 (KIAH), and later spread around extensively by the Hall campaign. Once again, I talked about the absurdity of this phony scandal at the time. Now, KRIV posts its third story on the matter, in a story which isn’t even all that anti-Parker in its core, but is harshly editorialized against her to portray a negative image in the headline.

The fox affiliate begins with the sensationalist headline of “MAYOR DEFENDS BIG RAISES FOR INNER CIRCLE.” They then took extended statements by both the Firefighter’s Union, but more specifically the Public Employee’s Union as well, out of context so that the most inflammatory, anti-Parker statements would be replayed.

KRIV then interviewed Mark Jones, the famed local political scientist at Rice University over the matter. Jones himself could not find any moral or ethical issues with the pay hikes, which he called “justified.” Somehow that bit of the interview was only mentioned in passing by the narrator, and was cut from the filmed portion.

This is the last I am going to write about this phony scandal so as long as none of the papers or major networks are touching it, as they should not.

Unethical pay raises at City Hall?

KRIV (Fox 26) reports on a developing scandal at City Hall. The Mayor, the station alleges, gave unethical pay raises to senior staff amid the devastating furloughs and layoffs that City Hall underwent in 2011. As many may recall, these furloughs and layoffs were a key point of contention between myself and Mayor Parker’s administration. I even went as far as sitting out the 2011 elections and endorsing the “Houston Public Employee” as my Person of the Year in 2010.

Anyways, in documents obtained by KRIV through the Firefighter’s Union, it is shown that in the first three years of Parker’s term, her Chief of Staff was given a 50% pay hike, while her Finance Director’s salary was raised nearly 150%. The Communications Director also saw her pay nearly double.

All this happening when rampant layoffs and paycuts were occurring. After contacting Parker’s office, KRIV did receive a response back from the Mayor’s office via email. In it, she stated “Members of the mayor’s staff were previously employed elsewhere in city government. Their positions in the mayor’s administration were promotions that came with salary increases.

There is obviously some truth to Parker’s statements, when one considers her history at City Hall. I’m not very familiar with the history of these individuals’ occupations, but I assume they worked for Mayor Parker at the Controller’s office. The transition between the 8th floor (Controller’s Office) and the 3rd floor (Mayor’s Office) does, in fact, mean a different occupation and, with it, a different salary.

By this logic, one could make the argument that Parker received a doubling of her salary by switching from being City Controller to Mayor.

Further, the claims made about the increased salaries give some insight into how lazy KRIV was in evaluating these allegations. I would like to share some of the excerpts they use to illustrate the points, and remark about why this does not make all that much:

Between **2009** and 2011 Parker’s Chief of Staff Waynette Chan was awarded a half dozen wage hikes lifting her salary from $123,000 to $180,000.

In a three year period beginning in **2009** finance director chief Kelly Dowe’s salary rose $77,000 to $190,000.

Parker’s communication director Janet Evans jumped from $76,000 in **2009** to $128,000 in just two years.

2009 is a year that keeps popping up. While Annise Parker was elected Mayor in 2009, she did not take office until two days into 2010. Accordingly, any salary received during any part of 2009 occurred before Annise Parker was the Mayor of Houston. If these individuals were employed by the City of Houston, they either worked for a completely different department or for Parker in the Controller’s office.

The only plausible way for these allegations to be true is if these individuals, Chan, Dowe and Evans, worked for Mayor White’s office. However, if this was true (it isn’t), then they would not be Parker’s allies, but rather would be career bureaucrats.

Lastly, these allegations are brought be the Firefighter’s Union, an organization we have already demonstrated has a vested interest against Parker‘s re-election. There easily could be more to the story, but from KRIV reported, this looks like a pretty phony scandal.