Texas House gives preliminary approval to Dallas pension overhaul

Six last-minute amendments have yet to be heard on State Rep. Dan Flynn's attempt to prevent Dallas' police and fire retirement system from going bankrupt within 10 years.

Texas House Pensions Committee Chairman Dan Flynn, R-Canton, listens to testimony on April 3, 2017.

The Texas House unanimously gave initial approval to an overhaul of Dallas’ troubled police and fire pension fund Wednesday. But six last-minute amendments from State Rep. Yvonne Davis, D-Dallas, have yet to be considered.

That will happen when the House takes a final vote Thursday.

Meanwhile, Dallas Mayor Mike Rawlings blasted the chamber’s unified support, which he said “dealt a brutal blow” to residents. Rawlings has drawn ire for his opposition to the bill. He said that taxpayers are being asked to contribute too much money, something he said will certainly force cuts to city services.

“They have been taken to the alley and beaten up pretty bad,” Rawlings said.

State Rep. Dan Flynn, R-Canton, spearheaded the legislative efforts to fix the pension system. It is expected to become insolvent within a decade thanks to a mix of questionable investments, generous benefit features and pension members’ collective withdrawals of more than $500 million from the fund last year.

His House Bill 3158 calls for changes in who sits on the pension board, changes to members’ benefits and alters the amount of money that first responders and City Hall pay into the fund.

Davis’ amendments to the bill were not immediately available late Wednesday. Flynn said he received them less than two hours before the House took its first vote on the legislation. He told Davis that he would need to read them before deciding whether to allow them to be added to the bill.

“We’ve been working on this for almost two years, and 4 o’clock amendments are not what I would anticipate,” Flynn told The Texas Tribune after the House vote.

Davis said her amendments lower the amount of money first responders would pay in, change how much the city would contribute and would give pension members the ability to make lump-sum withdrawals in some hardship cases.

“I’m hoping to give everybody some relief,” Davis said.

But Flynn said one provision could open the door to moving future employees to retirement plans that are less like pensions and more like 401(k)s, something he said could be a dealbreaker.

“Plain and simple, we want to look at all of them,” Flynn said.

Davis denied that any of her amendments include a provision that would move future employees away from defined benefit plans, like pensions, and toward defined contribution plans, like 401(k)s.

“I don’t have anything like that in there,” she said. “My stuff is simple, generic.”

When the House takes up the Dallas bill for the final time, Davis will need either Flynn or two-thirds of the entire chamber to back her amendments for them to be added to the bill. Late Wednesday, she said she’s also considered another amendment regarding the governing body of the pension board.

Rawlings has said that the city and not first responder groups should be able to appoint a majority of board members. Flynn’s bill essentially gives both sides five seats, with a tie-breaking post jointly appointed by the city manager and first responder groups.

Rawlings accused “police and fire union bosses” of putting political pressure on lawmakers. 

“I’m really indignant that people are acting like you have to do everything we want or you hate us,” Rawlings said. 

Davis said board members should be focused on what’s best for the pension system and its members.

“We don’t need them to be choosing teams,” she said.

Rawlings was traveling late Wednesday and it was unclear if he had seen Davis’ amendments. A police and fire pension spokesman did not immediately respond to requests for comment late Wednesday.

The Dallas police and fire pension system released a prepared statement calling the preliminary approval “a giant step forward,” but did not address questions about Davis’ amendments. 

“If adopted, the legislation will secure the pension fund’s solvency and stability and strengthen public safety in Dallas,” the statement said.

If a legislative aimed at overhauling the pension system isn’t successful this session, Dallas could face a number of dire scenarios, including crippling budget cuts, debilitating property tax increases and a crisis-level shortage of police officers and firefighters.

This year's vitriolic fights over legislative fixes to the failing Dallas and Houston pension systems have sparked tangential debates about the kind of retirements public employees should be offered and if Dallas should divert some of its public transit money to its pension fund.

Dallas’ failing fund has spurred criminal investigations, ignited political rifts and prompted Flynn to publicly criticize Rawlings, who opposes the bill over how much money it would require the city to contribute to the fund and how pension board members would be selected.

First responders support Flynn’s bill and last week accused Rawlings and other city council members of turning their backs on police officers less than a year after they vowed to “back the blue” immediately following the shooting deaths of five officers during what had been a peaceful protest.

The Senate on Monday passed a bill that will overhaul Houston’s pension funds and included a last-minute amendment that could switch future employees to a new kind of retirement system if shortfalls there persist or worsen. The House will take up a companion Houston bill on Saturday.

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