This commentary originally appeared in Houston Business Journal on August 14, 2015.

The Houston Business Journal’s recent opinion piece written by Mayor Annise Parker, "Houston finances not in turmoil," contained a number of curiosities. Chief among them was the contention that Moody’s latest ding against Houston was “due to concerns about pensions and the city’s voter-approved revenue cap limitation, but there was no mention of debt as an issue.”

It’s hard to see how this claim holds water.

While Moody’s decision to assign Houston a negative debt outlook certainly took into account the city’s soaring pension costs and inability to raise revenues, the agency’s press release is, ironically, titled: “$3 Billion in debt outstanding.” A short way through Moody’s analysis, the agency explains that “the city’s fiscal health remains challenged by rising expenditures from increased demand for services, and fixed costs (pension, OPEB, and debt).” The agency also estimated that “fixed costs (pension, OPEB and debt) equaled about 30 percent of the budget,” a worrisome figure to say the least.

Contrary to the article, local debt is a major problem in the Bayou City — and it’s going to take strong leadership and the right policy prescriptions to get Houston’s finances back on track.

James Quintero is director of the Center for Local Governance at the Texas Public Policy Foundation