Houston’s fiscal fortunes aren’t as rosy as you might imagine, according to a new report from Moody’s Investor Services, one of the nation’s top three credit ratings agencies.

In its report released late last week, Moody’s revised the City of Houston’s general obligation debt outlook to “negative” citing, among other things, increased government spending, rising debt payments, and mounting pension obligations. On the city’s increasingly worrisome pension problem, Moody’s had this to say:

In the city’s three pension systems, the total unfunded liability, as reported, equaled $3.2 billion, at fiscal year end 2014; nearly double the liability reported five years ago. Current forecasts indicate increased pension costs, which could further weaken the city’s financial position which include budget gaps in the five year projection. [emphasis mine]

Clearly, Houston’s pension problems are big and only getting bigger. But the situation is even worse than Moody’s report suggests.

That’s because there is no way for Houstonians to address their pension problems locally. As the Foundation has said in the past, some of the city’s retirement systems have maneuvered Austin in between themselves and Houston taxpayers, effectively blocking local pension control. This means that good government changes that should be made can’t be made outside of the legislative process.

That’s why any serious effort to address the pension problems highlighted in Moody’s report must include the restoration of local pension control. Anything short of that goal simply locks in a bad system and keeps the Houston taxpayer at a disadvantage.