DALLAS’ POLICE AND FIRE
PENSION FUND IS IN CRISIS

Taxpayers for a Fair Pension, a coalition of former Dallas Mayors and a diverse group of business and civic organizations, is deeply concerned about a potential $4 billion hit to Dallas taxpayers due to the looming pension crisis. This crisis was created by a convergence of outdated laws, unsustainable program features and risky financial investments. The result could land on the backs of Dallas taxpayers and jeopardize the city’s ability to maintain basic city services.

Dallas needs a fair and equitable Police and Fire Pension System that allows the departments to ensure a solid future for their employees and keeps the city competitive in its hiring while providing safe neighborhoods. At the same time, taxpayers need protection from massive bailouts and the assurance of basic services like trash pickup, neighborhood parks, libraries, and streets and alleys.

Dallas has put a solution on the table – one that fully funds the Pension Plan over a 30-year period without increasing property taxes or seeking state funds. The plan – with checks and balances in place – will protect base benefits for our first responders and ensure no one is treated inequitably, 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 effectively recapture past payments of overly generous features, which is the most equitable way to ensure all members, retirees and beneficiaries, receive their constitutionally 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.

DALLAS TAXPAYERS SUPPORT FIRST RESPONDERS

The City of Dallas and its citizens have done everything the state and public-safety officials have asked, and then some. The city has NEVER missed a payment to the Pension Fund. In fact, taxpayers have contributed over 80 percent of the funds and, in the past 10 years alone, have made direct cash payments totaling more than $1.1 billion.

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.

WHO WE ARE

Taxpayers for a Fair Pension, a coalition of former Dallas Mayors and a diverse group of business and civic organizations, is deeply concerned about a potential $4 billion hit to Dallas taxpayers due to the looming pension crisis. This crisis was created by a convergence of outdated laws, unsustainable program features and risky financial investments. The result could land on the backs of Dallas taxpayers and jeopardize the city’s ability to maintain basic city services.

OUR GOALS

Our mission is simple.

First, we 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 also keeping citizens safe and protecting taxpayers from financial bailouts.

Second, we’ll work closely with the Texas Legislature to authorize a new pension system that has the necessary checks and balances to provide equal governing authority to the taxpayers as well as the police and fire beneficiaries.

OUR CO-CHAIRS
Ron Kirk

Ron Kirk

Former Mayor of Dallas

Tom Leppert

Tom Leppert

Former Mayor of Dallas

Laura Miller

Laura Miller

Former Mayor of Dallas

OUR MEMBERS

BACKGROUND

THE PROBLEM
The Dallas Police & Fire Pension Fund crisis has been created by a convergence of outdated laws, unsustainable program features and risky financial investments by previous Pension Fund leadership. There is a potential $4 billion in unfunded liability that could damage Dallas’ and the region’s reputation and prospects for decades while leaving taxpayers on the hook.
THE FAQS
What happens if the pension fund isn’t fixed?
If not fixed immediately, many will suffer. In addition to a possible property-tax hike, the City and Dallas taxpayers will face massive debt obligations that will deter funding for city services such as trash pickup, neighborhood parks, libraries, streets and other general infrastructure improvements that affect our quality of life. Dallas’ credit ratings, which are already falling, could fall even further. Ultimately, Dallas’ ability to retain and attract business and create jobs will be seriously undermined, harming our tax base and deterring our ability to grow.

If a secure and stable retirement cannot be assured, recruiting and retaining Dallas police and fire personnel will become enormously difficult. It will also create hardships for the families of police and firefighters not in DROP accounts and place an undue burden on younger officers who are years away from retirement.

And if Dallas cannot recruit the best men and women to serve and protect, then the public safety of our neighborhoods will be in jeopardy.

How did this happen?
Years ago, the State Legislature established a pension system that gives control to the Board and the beneficiaries and not Dallas taxpayers. This flawed state law has allowed the Pension Board to adopt benefits and features for its members without control or oversight 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 has adopted extravagant benefits and features for its members. They’ve made things worse through poor investment deals – and even borrowed millions for unduly risky investments. No other governmental entity is allowed to take these kinds of irresponsible actions – and certainly not with impunity.  Current law does not grant Dallas the power to fix the pension system.

What is the DROP program?
In 1933, the Texas Legislature enacted a statute that still governs the plan today. The statute gives authority to members, allowing them to amend the plan in any way, including their own benefits and other features. In 1993, the Legislature established the Deferred Retirement Option Program (DROP). 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 had the power to make significant decisions without meaningful City Council or taxpayer oversight. As a result, Pension Board members have recklessly guaranteed themselves 8 to 10 percent returns throughout the DROP program, even during the recession when many other peer cities were not offering interest. Some Dallas Police and Fire DROP accounts have grown to as much as $4.3 million. Since August 2016, Dallas members have withdrawn more than $500 million – compromising the Fund’s ability to pay retirement checks.

Does the City support its public-safety employees?
Yes! Our first responders are among the nation’s best, and we have supported them valiantly. In the 2016-2017 fiscal year alone, the City of Dallas dedicated a total of $733 million to the police and fire departments – that’s 61 percent of the total general fund budget!

The City of Dallas and its citizens have done everything the state and public-safety officials have asked, and then some. Additionally, the city has NEVER missed a payment to the Pension Fund. In fact, 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.

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.

Why is it necessary to take action?
We must make certain that Dallas has a fair and equal Police and Fire Pension System, one that provides a solid future for ALL our police officers and firefighters. At the same time, taxpayers need protection from massive bailouts and assurance of basic services and amenities, such as trash pickup, neighborhood parks, libraries, and streets and alleys.
Must this be fixed now?
Yes! If the Legislature doesn’t make these changes during the 2017 Session, the current Dallas pension fund could run out of money by the year 2028, severely threatening young Dallas police officers and firefighters who are not part of DROP and are years, even decades away from retiring.
Is there a solution?

Dallas has put a solution on the table – one that will fully fund the Pension Plan over a 30-year period without increasing property taxes or seeking state funds. The plan – one with checks and balances in place – will protect base benefits for our first responders and ensure no one is treated inequitably, 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 effectively 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 can I help?

We urge you, your friends and co-workers to contact your state representatives in Austin to express your concerns about this financially devastating crisis. Click “Get Involved” to get started now.

GET INVOLVED

CONTACT YOUR STATE LEGISLATORS
We’ve made it easy for you to contact your elected representatives – simply fill in your mailing address to identify your districts, then send them an email with the tool below.

JOIN OUR
EMAIL LIST

Add your name to the list of concerned taxpayers.
This will allow us to contact you with up-to-date information on how you can support this important issue. Your information will be kept secure.

NEWS

George Will: America’s pension crisis is really coming

FEB. 22, 2017 Some American disasters come as bolts from the blue — the stock-market crash of October 1929, Pearl Harbor, the designated hitter, 9/11. Others are predictable because they arise from arithmetic that is neither hidden nor arcane. Now comes the tsunami of...

VISIT OUR BLOG TO KEEP UP TO
DATE WITH ONGOING NEWS

Visit Blog

CONTACT US

To contact us, send an email to info@taxpayersforafairpension.org

Copyright © Taxpayers For A Fair Pension

Copyright © Taxpayers For A Fair Pension

Share This