Former mayoral candidate Bill King not giving up fight with Turner on pension reform

Bill King ran for mayor in 2015 on a platform of fixing Houston's pension mess and narrowly lost to Mayor Sylvester Turner, who is now pushing his own hard-fought pension reform deal in the Legislature that he says will do exactly that.

Far from bowing out of civic life, however, King has emerged as arguably the chief opponent of Turner's broadly well-received proposal, a package the mayor spent much of his first year negotiating, to the exclusion of most other issues.

King has joined friend and ally Sen. Paul Bettencourt, R-Houston, in rallying opposition to Turner's proposal among conservatives. He has attended at least three dozen forums on the topic, by his count, and has been running social media ads touting his views on Facebook, has traveled to Austin to lobby legislators and has formed a pension-focused political action committee with Bettencourt.

The recent mayoral runner-up's central role in his rival's most important initiative is unprecedented, political observers say.

"It does somewhat seem like sour grapes for a defeated mayoral candidate to continue to campaign against his victorious opponent," said Rice University political scientist Mark Jones. "It perhaps would have been more productive to allow Sylvester Turner to handle this himself for the first legislative session of his tenure and only get more actively involved if that session had not resulted in a significant improvement."

$8 billion underfunded

Turner's reform package is intended to end a problem that has eroded the city's fiscal health since flawed projections led local and state leaders to agree to benefit increases for the city's police, fire and municipal workers in 2001, causing retirement costs to soar. Despite reforms to the police and municipal plans in 2004 and 2007, the city has failed to keep up with rising costs, leaving the three plans underfunded by nearly $8 billion today.

Turner's proposal would erase that debt in 30 years, cut benefits for workers, include a mechanism that would cap the city's future costs, and inject $1 billion in bond proceeds into the municipal and police plans.

King insists the aim of his critiques is to improve Turner's proposal, not kill it, and says he is not using the issue to position himself for another mayoral run.

His critics aren't buying that. They accuse King of acting out of self-interest in seeking to torpedo the reforms, or of at least failing to grasp that his actions will make that result far more likely.

In particular, King and Bettencourt want to move all new city workers to defined contribution, or "DC," pensions similar to 401(k)s - which the employee groups despise because it leaves their retirement pay vulnerable to market fluctuation - and to force a referendum on the $1 billion in pension bonds that are a key piece of the reform package.

"I would concede that it's unusual, but I don't understand why there's anything wrong with it," King said of his role. "Just because one candidate advocates some things and loses an election doesn't mean that all those things are wrong and are off the table forever."

King acknowledges his dozen email blasts attacking the proposal as a "secret" attempt to pass "a bad deal" that is "not real reform" and would "make the city a financial cripple" have sometimes been "harsh" or indulged in "hyperbole." But King says his campaign is issue-based, not the start of a second mayoral bid. He would have a better platform, he argued, if Turner's reforms passed untouched, because he could argue they were insufficient.

Both have wiggle room

Turner declined to wade into a debate about whether King was seeking to extend their 2015 showdown into 2017. The mayor said his push for pension reform is "not about any of the personalities here."

"We live in a very politicized environment, and everybody wants to view it in terms of the politics of it, but I don't want to get lost in that," Turner said. "It's not a Democrat plan and it's not a Republican plan. It is a plan that works best for the city of Houston, regardless of who you are."

With encouragement from King and Bettencourt, the Harris County Republican Party and the C Club both recently passed resolutions calling for the reforms to include moving all new employees to defined contribution plans and for voters to have a say on pension bonds.

But both groups left varying degrees of wiggle room on whether an initial round of bonds needed to secure the reforms would require a vote. King also said he would be willing to let the initial bonds be issued without a vote in exchange for moving new hires into defined contribution plans.

"My role here is to fire up the Republican base to support the two reforms that I want added to the bill," King said. "It is a Republican-controlled Legislature. The Republican base is not a little bit in favor of DC plans, they are way in favor of it."

'Seeking to kill the deal'

Not accounting for the union's certain negative response to these controversial provisions, lawmakers and legislative observers said, means King might as well say he wants the deal dead.

"(King) feels strongly that there should be defined contribution plans. He ran on that. We had a vote, and he lost," said Robert Miller, a former Metro chairman and a longtime lobbyist for the city's three pensions, among dozens of other clients. "That was not something the employee groups were willing to agree to. If you stick that in, there's a high likelihood that the agreement falls apart. He is seeking to kill the deal."

Labor opposition would imperil the deal, these experts said, partly because the city would be bound by its agreements with the pension funds to oppose whatever bills they don't support. That would fracture the Houston delegation, they said, giving lawmakers from other regions little incentive to wade into the fight.

Rep. Jim Murphy, R-Houston, noted that one of his pension reform bills failed in the last session when City Hall was forced to officially oppose it, despite the measure's clear benefits for the city.

Sen. Joan Huffman, a Houston Republican who is carrying the reforms in the upper chamber, has already drawn Turner's ire for agreeing to incorporate a referendum on the pension bonds. Though she said that clause was necessary to get the bill out of the Senate, she said more substantial changes would be dicey.

"If the systems did not buy into a different solution than what they've already agreed to, then in all likelihood trying to push some dramatic new solution on them would result in loss of support for the bill and probably loss of legislative support," Huffman said. "My intent is to have a solution that's fair to the taxpayers and I'll continue to work with the parties toward that end."

Points on both sides

Josh McGee, an Arnold Foundation pension expert who chairs the state Pension Review Board, said the policies King is pushing are worth discussing, but he said it is a "mischaracterization" to suggest, as King has, that the Houston reforms are not real and substantial.

"I wish Bill King would be more clear as to what he's trying to achieve," McGee said. "Some of the things that he is asking for - voter approval for pension obligation bonds and consideration of DC for new employees - are reasonable things to say. The way he's gone about raising those points is, at times, less than constructive."

However, McGee said, Turner's statement last week that Huffman's decision to include a pension bond referendum in her bill was a "poison pill" was similarly unhelpful.

"Both sides are cheapening the policy debate because they want to win on political grounds," McGee said. "We've got a pretty good policy recommendation on the table. Sure, we can make it better. Let's talk about how to make it better instead of fighting about talking points."