Across Texas, Public Pensions Face Billions In Shortfalls
Credit rating agency Moody's has once again downgraded the city of Dallas bond rating. It means the city will pay more interest on new debt. The agency cited, in part, the troubled Dallas Police and Fire Pension Fund. It could go broke in about a decade if changes are not made.
The pension fund has asked the city for a billion-dollar bailout – and an election is underway as fund members vote on proposed benefit cuts.
Public pension problems go beyond Dallas. KERA’s Eric Aasen talked with Texas Tribune reporter Brandon Formby, who’s been studying what’s happening in other cities across the state.
Here's what Formby reported earlier this month:
The state’s largest cities face tens of billions of dollars in unfunded liabilities to employee pension funds, a series of separate financial situations that is spurring massive account withdrawals, ongoing lawsuits, mounting political friction and national media attention.
Austin, Dallas, Houston and San Antonio collectively face $22.6 billion worth of pension fund shortfalls, according to a new report from credit rating and financial analysis firm Moody’s. That company analyzed the nation’s most debt-burdened local governments and ranked them based on how big the looming pension shortfalls are compared to the annual revenues on which each entity operates.
“Rapid growth in unfunded pension liabilities over the past 10 years has transformed local governments' balance sheet burdens to historically high levels,” the report says.