AUSTIN –Moody’s Investor Services, one of the nation’s top three credit rating agencies, 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 costs. Moody’s report is the latest signal that the status quo is unsustainable in the Bayou City. Texas Public Policy Foundation’s Center for Local Governance Director James Quintero issued the following statement on the revision:
“Moody’s report is a clear indication that the City of Houston needs long-term structural spending and debt reforms so as not to become the Detroit-of-the-South,” said Quintero. “Unfortunately, when it comes to public pension reform—an area singled out for reform in Moody’s report—the city’s current posture prevents good government ideas from becoming reality.
“Some of the city’s largest local retirement systems have made it all but impossible to make changes locally because they have codified their plans in state statute. This has effectively taken local control off the table and put Austin between Houstonians and their troubled pension plans. Any serious effort to address Moody’s negative debt outlook must include the restoration of local pension control so that Houstonians have some say over how their broken systems are fixed.”
To schedule an interview with Mr. Quintero, please contact Caroline Espinosa at [email protected] or 512-472-2700.
James Quintero is director of the Center for Local Governance at the Texas Public Policy Foundation.
The Texas Public Policy Foundation is a non-profit, free-market research institute based in Austin, Texas.