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.

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.


  • Greg Brown

    “This group includes Ron Kirk, Laura Miller, Tom Leppert. . .” Oh you meant the ones that through their own negligence and disinterest allowed this happen in the first place?

  • Mavdog

    Interesting the release goes into a comment about “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”, and points multiple times to “this law” as part of the problem….yet forgets to mention that the City leadership, during Ms. Miller’s tenure I must add (typically I’m complimentary of Ms. Miller’s tenure…), dropped the ball and did not exercise the City’s right to “opt out” of the mentioned law. Should have had that vote and should have opted out like Houston did.

    Not that opting out would have prevented the ridiculously generous DROP program or the ill advised real estate investments done during Mr. Tettamant’s tenure, but opting out would make this process of fixing the Fund much easier.

    • Wylie H Dallas

      This is all very interesting. Can you point me to a source where I can get more info on this failure to opt out (an article, etc.)?

    • Wylie H Dallas

      Found an article discussing this. This makes Laura Miller’s participation in this new group all the more odd. Not only did she fail to ensure that the city exercised proper supervision of the fund during her entire tenure, she failed to take advantage of a one time opportunity to opt-out of a new state law that would have made fixing the fund much easier. Houston did that– why not Dallas?


      • Mavdog

        Texas Constitution, Article 16, Section 66 (h). Do not remember ANY discussion at the time about the possibility of having a local vote to exercise the “opt out”.

        Opportunity lost.

        Let’s not solely blame the City for the DPFP Board mistakes or the current situation at the fund, as there is plenty of blame to pass around. However it is fair to say that the City representatives on the Board were AWOL and the City leadership was not paying attention.

        There is also the unanswered question of if the City is responsible for making up the shortfall in assets and preserving the benefits promised, or by paying the $ it has done in the past the City has fulfilled its responsibilities. That will likely be answered by a court in the future.

  • “Engineering a Pension Crisis”

    Why Now and for What Purpose ….and in Jan of 2017 Has the “Pension” been placed in “Such a Precarious Position…?????

    I submit to All my fellow Retirees and the Board of Directors of the newly formed Dallas Police Retirees Organization the Following Pertinent Facts !!!!!!

    Buck’s Actuarial since the mid 1990’s was the State required Actuarial Firm representing “The Dallas Police and Fire Pension Fund”.

    Buck’s Actuarial has an impeccable reputation on Wall Street and for that matter “National and International Recognition” for

    Fiduciary Reporting and Auditing . There Recognition was acknowledged in 2015 by a Certificate issued by the ” United States and Canadian Commission for Pensions”

    recognizing them for Outstanding Fiduciary reporting. This Fact is acknowledged by the Dallas Police and Pension Board and Director Kelly Gottschaulk !!!!

    However this Actuarial Companies Services were not retained by the Dallas Police and Fire Pension Fund for 2014-2015 and the 2015 -2016 Actuarial reporting period

    and their conclusions sent to the State of Texas Pensions Board for Review and Analysis as required by State Law . A new Company was retained by the Board “Segal’s Actuarial Firm”

    This Firm had only in the last three years bought out and merged with “Waters Consulting Group Inc.a Dallas Based Actuarial Company . This Company Deals with the Auditing and evaluations

    regarding Equity investments and plans .

    I submit the Following Above Mentioned Evidence and following stated facts as to How the Parameters effecting our 76 % Funding rate “Came to be Questionably Changed and Engineered ” after Buck’s Actuarial Services were

    TERMINATED to its current State of 45 %-54% ?? Well below the State of Texas requirement of 60 % for Troubled Pensions .

    Buck’s as early as 2010 through 2012 recognized shortfalls in the Pension Fund and proposed plans to address these long-term shortfalls with Pension Board approved

    Amendments in 2010 and 2012 by allowing for a one per cent yearly reduction in interest rates from 8 per cent to 4 per cent from 2014 through 2018 and other small

    and legally challenged changes to Retirees Benefits.

    In 2014 City Council Lee Kleinman was appointed to the Pension Board by Mayor Mike Rawlings

    With his suggestions through his tenure on the board until his removal for a conflict of interest in 2015. He proposed against the wishes of prior seasoned Police and Fire board members and

    Buck’s Actuarial representative “Not To” go with the Amendment that the Board eventually approved in August of 2016 to have a vote on by Active Police and Fire Personal on December of 2016 to

    immediately reduce the “Interest Rate” from 7 per cent to 3 per cent and to Zero per cent….” If” and “When the Funding rate fell below the State of Texas Pension Board requirement of 60 %

    Buck’s representative and Prior 2015 Board members agreed that it would cause a “Run on the Bank” Against this Recommendation …..Kleinman and the Current elected Board Members ignored this Advice

    and from October till November of 2016 ….$500 Million Dollars left the 1.5 Billion Dollars in the D.R.O.P. Accounts of a 2.8 Billion Dollar Pension Fund .??????

    I submit to You Further Evidence of a deliberate and calculated action to Create and argument to Present to the Texas State Pension Board of review and the State of Texas 84th Legislative Session

    starting in Jan of 2017 to give the City of Dallas with Pension Board Approval an Argument to Legally Approve the City of Dallas Hostile Takeover of the Pension Plan to give the Mayor sweeping authority

    to implement “Claw back” and other Detrimental actions to effect the Current Stability of retirees benefits.

    I Further submit Evidence of Illegal and possibly Criminal Fiduciary engineering from an Article in the Dallas Morning news on Thursday, January 12th 2017 stating ” City Leaders are also

    seeking to pair the Pension System fix with a tweak to state law that may give the City Immunity to the Pay Referendum Lawsuit ” that could put the city in Bankruptcy”

    I submit to all Dallas Police and Fire Retirees a Calculated and Deliberate and Possibly Criminal Act Perpetrated on the “Financial Stability of the “Pension Fund” to Create a “Pension Crisis” to meet the Mayors narrative for a solution to the 25 year old “Pay Lawsuit”

    and the Boards Long Term but not Immediate Financial problems as addressed by “Bucks Actuarial” our Former Long term financial reporting Company.

    The following was cut and pasted from the 2014 – 2015 Acturial Report by Segals regarding the “SO Called Necessary Changes” to the Pension Plan which in hindsight shows a Deliberate and calculated

    act to write down for 2014-2015 our Prior reported by “Buck’s” actuarial 2013 Real Estate findings an …”Additional 500 Million thus immediately changing the Funding rate from 76 per cent to 45-54 per cent with the Consent and “No Argument” from the Pension Board.

    How Could The Pension Board allow this to happen and Currently Create the Fiscal Crisis We Now find ourselves in …?????? read the following balderdash that should have had all of “Us Raising Red Flags….!!!!!!!!!!

  • Ryan Hogue

    The rich elite vs. the middle class worker?Nothing was mentioned about the 4 city representatives not showing up to the pension meeting. They had almost zero attendance over a 10 year period, those council members had a duty to represent the city which they shamefully no-showed, which does in fact make the city copable for the mismanagment if there appointed representatives didn’t show up. The fact that Dpd and Dfr are underpaid about $20k per year and the city has retained members with the promise of a lucurative retirement despite low pay (Hutchins, Tx pays $6k per year more starting out). The pay increase over the next 3 years only returns half of the pay cut they were forced to take in 2010, 2011, and 2012. In 2013 after three years of pay cuts. The city manager doubled his $200k salary to $400k….only to retire 3 years later doubling his highest 3 years of service meaning he will make $400k the rest of his life instead of $200k. Also in 2013 the city council tripled their salary. All while the benefits given each year to Dpd and dfr have worsened (it cost an office almost $800 a month to insure his family). All while the mayor has run a neg ad campaign, blamed this bailout on the reason the streets will not get fixed, and publicly forecasting bankruptcy which actually incited the run on the bank that got us to where we are at. Why is this reporting so one sided….because the wealthy and elite are standing up to unite to save the tax payers of Dallas?!? Is dmagazine only catering to the Dallas elite?

  • Ryan Hogue

    “Dallas’s tax payers support runs deep for its first responders, Dallas dedictes 733 million a year……61% of its budget to police and Fire”
    That is one of the lowest percents In the country for a city the size of Dallas!! Austin, San Antonio, and El Paso all pay a much higher percents. Austin spends 69.2% on public safety and Houston spends over 1.3 billion dollars a year on public safety. Can we please not mispresent the data.

  • Debbie Carlin

    Here is something the citizens of Dallas and the Representatives in Austin need to know…

    All three of these chairs, as past Mayors, had the opportunity to fix this problem when they were in office. The problem is NOT the pension. The problem is a 23 year old lawsuit filed by Police and Firefighters to require the City of Dallas to abide the requirements established by a referendum decided by the voters of the City of Dallas.

    Years ago this suit could have been settled for very little money, but the City kept kicking the can down the road and letting interest accrue at 6% per year until now when the bill could be as high as $4 billion. This is the City’s estimation, not mine. Now the City is in panic mode because the case it set to be heard in May.

    So now the City is holding the Pension hostage and finding ways to punish all Fire and Police by taking benefits they have already accrued. But I will bet the public won’t hear much from the City about how they mismanaged this case and now are on the hook for a big payout. So when you read their propaganda that talks about a $4 billion dollar fix – that is the cost of the lawsuit they are trying to legislate their way out of the mess they created.

    Is the Pension a problem? Yes, but not as big a problem as this lawsuit and the committee is trying hard to keep that part out of the public eye.