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Politics & Government

New Group Launches To Fight Pension-Driven Tax Increase

Taxpayers for a Fair Pension doesn't think citizens should pay to bail out the pension.
By Tim Rogers |
Kirk, Leppert, Miller
Kirk, Leppert, Miller

Have a look at the full release below, if you’re inclined. The group is called Taxpayers for a Fair Pension. They want two things: 1) no taxpayer-funded bailout for the Police and Fire Pension System and 2) the Lege to rework how the pension operates. They argue for a claw back of some of the money already paid to pensioners (hard to see that happening) and increased contributions to the pension from the city, the additional money coming from anticipated economic growth, not increased taxes (it’s fun to dream).

So we’ll see about all that. Meanwhile I can’t help but focus on one sentence in the press release. Among others, this group includes Ron Kirk, Laura Miller, Tom Leppert, and members of the Citizens Council. Here’s the sentence: “During the next six months, Taxpayers for a Fair Pension will launch a grass-roots effort with a two-fold mission.” Grass roots?

UPDATE (3:19) Now I’m focused on another sentence in the press release, thanks to an emailer. It’s this: “ ‘Dallas has one of the strongest economies in the nation, having attracted more than 75 corporate headquarters as well as 500,000 new jobs since 2010,’ said Dale Petroskey, president and CEO of the Dallas Regional Chamber.” That’s simply not true. He’s talking about North Texas, not Dallas. The pension thing is an issue for the city of Dallas. North Texas numbers don’t belong in the conversation.



Coalition leaders deliver “call to action” to Dallas taxpayers, asking for their support to prevent tax increases and falling bond ratings and help secure fair pension programs for all of Dallas’ first responders

DALLAS (Jan. 27, 2017) – Concerned about a potential $4 billion dollar hit to Dallas taxpayers caused by the Dallas Police and Fire Pension System crisis, a coalition of former Dallas mayors and a diverse group of business and civic organizations are forming Taxpayers for a Fair Pension.

During the next six months, Taxpayers for a Fair Pension will launch a grass-roots effort with a two-fold mission. First, the coalition must make certain Dallas has a fair and equitable Police and Fire Pension System that provides a solid future for all our police and firefighters – including members, retirees and beneficiaries – while, at the same time, keeping citizens safe and protecting taxpayers from financial bailouts. Second, the coalition will work closely with the Texas Legislature, urging them to authorize a new pension system with the necessary checks and balances, and one that provides equal governing authority to the taxpayers as well as the police and fire beneficiaries.

“Dallas is blessed with among the nation’s best police and fire departments, and we have supported them valiantly,” said James Martin, president of MetroTex Association of REALTORS. “However, the fiscal viability of Dallas hangs in the balance due to a crisis caused by converging developments that could cost taxpayers a potential $4 billion in unfunded liability.”

The coalition is driven by the fact that, if action isn’t taken quickly, the repercussions will be deeply and irretrievably felt. Property taxes could rise. The ability to hire the best public safety officers will be hindered. The City’s debt ratings – which have already been downgraded – will likely drop further, increasing the cost of financing quality-of-life programs that require bonds, such as streets, parks, libraries and public facilities.
“We’re delivering this call to action because this crisis will affect Dallas residents in the pocketbook for decades to come,” said Rick Ortiz, president of the Greater Dallas Hispanic Chamber of Commerce. “If not resolved, taxpayers could see a property tax hike, and the massive debt obligation will deter funding for key city services and desirable amenities that affect our quality of life.”

The co-chairs of Taxpayers for a Fair Pension are former Dallas mayors Ron Kirk, Laura Miller, and Tom Leppert. Members to date are the Dallas Black Chamber of Commerce, Dallas Citizens Council, Dallas Regional Chamber, Greater Dallas Asian American Chamber of Commerce, Greater Dallas Hispanic Chamber of Commerce, MetroTex Association of REALTORS, North Dallas Chamber of Commerce, Oak Cliff Chamber of Commerce, Stemmons Corridor Business Association and The Real Estate Council.

“Dallas has one of the strongest economies in the nation, having attracted more than 75 corporate headquarters as well as 500,000 new jobs since 2010,” said Dale Petroskey, president and CEO of the Dallas Regional Chamber. “That has made us one of the most desirable places to live, work and do business in the United States. But our antenna is always up for things that could stall our momentum, and the pension crisis, if not addressed, would certainly be a concern. Action must be taken now.”

Dallas supports its first responders
Taxpayer and City support runs deep for their first responders. In the 2016-2017 fiscal year alone, the City of Dallas dedicated a total of $733 million to the police and fire departments, representing 61 percent of the total general fund budget.

Additionally, the city has never missed a payment to the Pension Fund. Taxpayers have contributed over 80 percent of the pension funds and, in the past 10 years alone, have made direct cash payments totaling more than $1.1 billion to the Dallas Police and Fire Pension Fund. Further, in the latest budget cycle, the City Council increased starting pay to keep salaries competitive and approved raises over a three year period. When fully implemented in 2020, those pay increases will add $89 million to the City’s annual budget as compared to fiscal year 2016.

City of Dallas proposes plan to resolve crisis – without a property-tax hike
Dallas has put a solution on the table – one that will fully fund the Pension over a 30-year period without increasing property taxes. The plan – one with checks and balances in place – will protect base benefits for our first responders and ensure everyone is treated equitably, including taxpayers. The plan will require state legislation and tough choices by the city and its public-safety employees.

The money will come from increased contributions from the City (from anticipated economic growth) and public safety employees, and cuts to overly generous features. Importantly, Dallas’ plan will recapture past payments of overly generous features, which is the most equitable way to ensure all members, retirees and beneficiaries, receive their protected benefits. Dallas’ plan does not require any money from the State, and most importantly, it does not force a bailout on the backs of taxpayers. Finally, Dallas’ plan sets control at the local level for a locally financed solution.

How did this happen?
The roots of the crisis began years ago when the State Legislature established a pension fund that gave control to the Board and beneficiaries and not Dallas taxpayers. This flawed state law has allowed the Pension Board to adopt benefits and features for its members without control from the City or accountability to taxpayers who contribute a majority of the dollars into the fund. Under this law, only the Legislature or a majority of Pension members can amend it.

The Pension Board adopted extravagant benefits for its members and made things worse through poor investment deals – and even borrowed millions for unduly risky investments. Current law does not grant Dallas the power to fix the Pension system. The Pension Board also voted in favor of over-the-top benefits and generous features for some called Deferred Retirement Option Program (DROP) accounts. That same year, the Dallas pension fund members voted to change the board makeup, dramatically diluting the City and the taxpayers’ representation.

Currently, the 12-member Pension Board has eight appointees, and the City of Dallas only has four, which means the Board has the power to make significant decisions without meaningful City Council or taxpayer oversight. As a result, Pension Board members have recklessly guaranteed 8 to 10 percent returns throughout the DROP program, even during the recession when many other peer cities were not offering interest. Since August 2016, DROP members have withdrawn more than $500 million – compromising the Fund’s ability to pay retirement checks.

Citizens urged to sign up at website and post on social media
For more information, go to TaxpayersForAFairPension.org for updates and additional information and to sign up for the “Concerned Taxpayers” list and e-newsletter. Also, taxpayers may post on social media – Facebook at Taxpayers for a Fair Pension and Twitter at @Dallas4Pension.

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