Endorsement: The Texas Conservative View

I am honored to be endorsed by the distinguished women of the Texas Conservative View. Thank you.

 

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The Candidate with a Plan

When the 2015 Houston municipal election cycle began, I had absolutely no intention of running for office.

However, I felt compelled to run as I became more aware of the fiscal crisis the city of Houston was facing. When the direction the city needs to head to avert financial catastrophe crystallized, I felt very strongly that if I did not step up then no one who had the courage, conviction, or resolve to take us in the right direction would.

The Houston electorate could accept my market-driven reforms or reject them - but I felt it would be irresponsible of me to not give them the opportunity to vote for leadership that offered an alternative path away from bankruptcy and towards solvency.

The city's financial troubles are primarily driven by the city's unaffordable, unsustainable, and antiquated pension system in addition to an increasingly hostile regulatory regime making it tougher and tougher to do business in the city - which is unnecessarily costing Houston valuable sales tax revenues as those businesses flee the city limits.

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After observing the the implosion of Detroit with interest as someone with a degree in finance from The University of Texas at Austin and as someone who teaches economics, I knew there were key lessons to be learned from that debacle for all stakeholders in every major metropolitan city.

It was surprising and alarming to see the same warning signs flashing brightly in the city of Houston, and disconcerting to see our city's leadership appear helpless to confront the challenge. After all, Houston has a reputation as a business-friendly city that pragmatically manages its finances.

However, that reputation does not appear to be well deserved over the past 15 years and may instead be due to the halo effect imparted by the city's tightly run Fortune 500 companies that are headquartered here as well as to the fact that Houston is the largest city in Texas - a very fiscally conservative state with the highest possible ratings from Moody's, S&P, and Fitch bond rating agencies (higher than the United States') and $4 billion in its rainy day fund.

However, if the city of Houston were being run in the same fiscally prudent manner that the state of Texas or even Harris County are operated, clearly it wouldn't be facing over $100 million in budget shortfalls for every year into the future and $3 billion in accumulated unfunded liabilities.

On the contrary, Houston had its outlook downgraded by Moody's earlier this summer - and the bond-rating agency cited the city's pensions as a key reason for the downgrade.

At the same time what needed to be done became clear, I was equally convinced that no politician running for office simply out of a craven desire to get elected to assume power would run on a platform of the tough, market-driven policy solutions needed to balance the city's books anytime in the near future.

That's why I decided to throw my hat in the ring.

If nothing else, Houstonians needed a candidate with a plan that would close the city's budget shortfall. Houstonians could accept or reject me and my plan - but they couldn't say that they weren't given the opportunity to vote for a new direction guided by market-driven fiscal prudence.

So, I put forward my plan to transition the city's pension system towards an individual retirement account system so that municipal employees currently receiving pensions and those near retirement could have the security of knowing they could continue to receive them while we leveraged our most valuable and diminishing asset in this crisis - time - to move towards a system that was sustainable going forward.

Currently, the $3 billion in unfunded pension obligations represent three billion empty promises to our police officers, firefighters, and municipal employees. That's just wrong.

However, if the city of Houston can't keep those promises in the midst of one of the largest oil and gas booms in recent history the chances of meeting those obligations now that we are heading into a slump in the industry are non-existent. So, if we are making promises we can't keep, the first step is to stop making those promises.

Without addressing the pension crisis, there will be no funds to improve our city's streets and infrastructure, there will be no funds to improve public safety in the midst of a recent spike in crime, and there will be no funds to invest in any quality of life amenities. All roads to a fiscally sound and financially solvent Houston go through pension reform.

Unfortunately, the city's three largest municipal employee unions have decided that they would rather gamble their members' futures on the proposition that there is some magic untapped source of money to make good on those empty promises. What is more likely is that by attempting to maintain the current pension system, they and their political co-conspirators will drive the city into bankruptcy which will likely result in a bankruptcy judge eventually taking a chainsaw to their members' retirement benefits. It will be a tragic outcome when a prudent path to reform the pension system was available that gave their members in or near retirement the security and peace of mind they deserve while transitioning the rest of the system towards a system that's affordable to taxpayers in the long run.

Another clear benefit of transitioning to an individual retirement account system to our public employees not already in retirement or near retirement is that they would never again face an election in which their retirements were hanging in the balance. 

There are many things one should consider when voting in an election - but one's ability to make ends meet when one retires should never be one of them. Individual 403(b) retirement accounts would be paid to our municipal employees, police officers, and firefighters each and every pay period - and the moment those funds left the Houston city treasury and were deposited into employee personal investment accounts those funds would become private property that could never be taken away by any politician. That seems a lot more secure than our current system.

I want to make clear that this discussion about the pension crisis is not about what our municipal employees deserve. The fact of the matter is that our firefighters and police officers deserve far more than the city can ever afford to pay them - in either direct or deferred compensation - which is why they enjoy such support from Houstonians who recognize that we will never be able to pay them enough to fairly compensate them for their service to society.

The second part of my plan to resolve the city's finances revolves around making it easier to do business in the city of Houston so that companies don't move outside the city limits - and take their sales tax revenue with them. To this end, I unveiled an innovative plan to reform the city's permitting process using lessons learned from how other cities found efficiencies in the wake of the 2008 financial crisis combined with my knowledge of markets.

Taken together, I believe these two documents clearly show that I would be a force for market-driven fiscal prudence on city council and clearly illustrate my approach to government policymaking.

If you share my concerns about the fiscal crisis the city is facing and, like me, believe the solution is to make the city operate more efficiently instead of paying more taxes, more fees, or put up with reduced services that Houstonians have every right to demand of their municipal government - such as drivable roads and a safe, clean city - then I hope you will consider voting for me, Jonathan Hansen for Houston City Council At-Large Position 4.

That's because - just as I suspected at the outset of the campaign - while I have heard lots of platitudes, to date I am the only candidate in the race for Houston City Council At-Large Position 4 who has put forward such a plan.

Early voting continues from 7am-7pm until Friday, October 30. During early voting one may vote anywhere in Harris County. To find an early voting location please click here.

Election Day is Tuesday, November 3 from 7am-7pm. On Election Day, one must vote in one's precinct. To find where one's precinct voting location is, please click here.

Thank you for your consideration and support.

For a Greater Houston,

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It's a Sign...

The terrible condition of the Houston city streets are signs of fiscal mismanagement at city hall. They are symptoms of the dual diseases that are the pension crisis and the city's increasingly hostile regulatory environment.

This is a sign you should vote for Jonathan Hansen for Houston City Council At-Large Position 4 to bring fiscal discipline, restraint, and reform to city hall. Houston city government needs to focus on the real issues Houstonians are facing every day - terrible roads, congestion, and crime - instead of issues that are more symbolic than substantive.

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Jonathan is the only candidate in the race that has put forward detailed proposals to reform the pension system for the benefit of taxpayers, employees, and pensioners. Likewise, he has proposed an innovative reform aimed at reforming the city's permitting system to stem the flow of businesses exiting the city limits and taking their sales tax revenues with them.

If you believe that free markets and free people would make for a greater Houston, please vote Jonathan Hansen for Houston City Council At-Large Position 4.

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Matt Murphy: Conservative Hero or HERO Flip-Flopper?

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Matt Murphy has been a vocal opponent of the Houston Equal Rights Ordinance (HERO) since the Texas Supreme Court ruled on July 24 against the city’s attempts to protect the ordinance from public scrutiny, however Murphy indicated on July 6 to the Houston GLBT Political Caucus PAC that he supported HERO when he was seeking their endorsement.

To be clear, not a single word or punctuation mark in the ordinance was changed between the day it was passed by Houston City Council on May 28, 2014 and when Murphy submitted his candidate questionnaire on July 6, 2015. Likewise, not a word or punctuation mark was changed between the the date Murphy submitted his candidate questionnaire and a short 18 days later when the Texas Supreme Court issued its writ of mandamus ordering the city of Houston to either repeal the ordinance or put it on the November ballot.

However, in an incendiary July 30 interview with Doc Greene of Raging Elephants Radio, Murphy talked at length about his newfound opposition to HERO and chuckled along while the host shamefully referred to Mayor Annise Parker as "Pervert Parker" for no other reason than the fact that she is a lesbian.

In a post on his website dated July 24 Murphy stated, “Mayor Parker made H.E.R.O. her own little ‘Trojan Horse’ by saying that it was eliminating discrimination and providing equal rights to all Houstonians, but in reality, she was trying to provide special rights for a select group of the GLBT community.”

Murphy further commented, “The current language of the Houston Equal Rights Ordinance does not provide those [religious, civil, and property right] protections, so if given the opportunity to vote as a citizen of Houston, I will be voting ‘NO’.”

However, that was not Murphy’s tune prior to the Texas Supreme Court’s ruling.

In the Houston GLBT Political Caucus PAC City Council Candidate Questionnaire in a document signed and dated July 6, Murphy expressed unequivocal support for HERO.

In Question 6 of Section IV. Municipal Issues on Page 5, Murphy completely contradicted his claim above by stating, "This ordinance is not about special treatment for some, it is about equal rights and treatment for all."

Unfortunately, Murphy's contradictions don't end there.

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Reforming Houston's Permitting Process

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This is the third in a series of white papers I have released on what I believe to be important issues facing the city of Houston that will also have the benefit of illustrating my approach to policymaking. The first white paper covering my position on the minimum wage can be viewed here, and my second white paper covering my pension reform proposal can be viewed here.


Dear Fellow Houstonians --

The Houston Permitting Center (HPC) has become a notorious bureaucratic labyrinth that industry, entrepreneurs, and builders complain is slowing down the speed of business in the city. In order to make sure Houston continues to be a city built for business, rectifying this problem must be of the utmost importance to the next mayor and city council.

Those applying for required city permits and licenses often tell stories of being given incomplete and conflicting information depending on whom one is speaking to at the moment. In addition, HPC customers complain of having to deal with a frustrating run-around due to different cogs in the system only knowing their small function and not knowing the functions of other parts of the system. 

That leaves permitting customers – including trained construction management professionals – bouncing around from one department to another until they hopefully are able to talk to the correct person...eventually.

Also, certain industries are complaining that there are businesses ready to open that are being delayed only because they are unable to obtain the necessary permits and licenses due to backlogs at the HPC. 

All of this wastes time and money (but I repeat myself.)

I have heard many meritorious proposals to improve the permitting process, including ePermitting and allowing building plans to be submitted via PDF files instead of carting wheelbarrows full of building plans around the HPC. However, while these may be very good solutions for remedying the challenges to an effective and efficient permitting process today - just like bringing all of the city's permitting apparatus under one roof was yesterday's solution when the HPC was created - my concern is what can we do to make sure that there is a continuously improving process that is able to adapt to new innovations in the future?

Now, I cannot claim to be an expert on permits (although it doesn't sound like the experts are doing such a great job, given the number of complaints,) but what I do know about is how to leverage competitive market forces to improve value and customer service.

Therefore, in consultation with architectural and construction management professionals, I have devised the following proposed reforms to leverage competitive market forces to improve the customer experience of those seeking to add to the built environment and do business in the city of Houston.

This proposal broadly outlines the direction I believe Houston should head with regard to creating a continuously improving permit-issuing process. However, this is not intended to be a final product, and I'm sure that there will be many additional suggestions to improve it in the future as further input from industry and stakeholders is received.


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Pension Reform to Save Houston from Detroit's Fate

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This is the second in a series of white papers I will be releasing on what I believe to be important issues facing the city of Houston that will also have the benefit of illustrating my approach to policymaking. The first can be viewed here.

Pension Reform Proposal:

Executive Summary

Jonathan Hansen for Houston City Council

At-Large Position 4


Fellow Houstonians -- 

  • Houston’s operating deficits are unsustainable, and they are primarily driven by pension costs. Pensions are the reason Moody’s recently downgraded the outlook for the city’s $3 billion in bonds to negative and why the city is projected to run a $126 million deficit next year.
  • In 2013, Houston’s unfunded actuarial liabilities were $3.6 billion and their unfunded market value liabilities were $13.7 billion – 788% of tax revenue.
  • If the city does not act to resolve the looming pension crisis it will eventually head towards bankruptcy like Detroit and Greece before it. This would likely ultimately result in city pensioners having their pensions reduced in bankruptcy court - a tragic result that would benefit no one.
  • The seeds of the pension crisis were planted with a "benefit enhancement" that began in 2001 during the administration of Mayor Lee Brown. The pensions were virtually fully funded up until that point. 
  • Houston needs to move to a defined contribution retirement system. If it had one in full effect for the 2016 budget year instead of a defined benefit retirement system, the city would in one year save $286.8 million – enough to wipe out the $126 million projected deficit, replace the $125 million per year ReBuild Houston funds without any new taxes, and leave $33.8 million to invest in additional police officers, raising the pay of underpaid municipal employees, invest in quality of life initiatives, or accelerate paying down the city’s $3 billion in debt (and likely $600 million in ReBuild Houston tax rebates.)
  • Transitioning to a defined contribution system would increase the city’s debt load in the short run, but markets would look favorably upon this increase in debt because it would be in the service of structurally balancing the city’s budget in the long run.
  • While it would be desirable to have local control over the city’s pensions, it is not necessary to begin putting together an adequate reform proposal. Houston must seize the initiative and pass a pension reform proposal to present to the state legislature while still ultimately pressing for local control of the city’s pensions.
  • The Texas Legislature would approve of a pension reform that moves the city’s pensions towards a defined contribution retirement system once the stakes are made plain and they see the city’s leadership clamoring to avert a financial disaster that would be an embarrassment to the state. Without city leadership on this issue, however, the legislature cannot be expected to act proactively on its own to help Houston solve a problem of the city's own making.
  • All candidates for municipal office this year should release their own detailed proposals for dealing with the city’s pension crisis. They should also release any and all questionnaires they filled out seeking the endorsement of municipal, fire, and police unions and affiliated organizations so Houstonians can see exactly what bargains have been made on their behalf in seeking those endorsements.
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When's Recycling Day? Now There's an App for That!

Congratulations to Houstonian Kenton Gray who was one of three winners in the third annual citywide hackathon event for his iPhone app Rollout! Houston which "allows the app to access [one's] location and then, using the city's trash, lawn clippings and recycling schedule, it loads a tailored monthly calendar. If that's still not sufficient, users can set a reminder alarm, too." ("City hackathon yields app for trash, recycling schedules," by Katherine Driessen, Houston Chronicle, July 2, 2015.)

Mr. Gray's is the first app to come out of the citywide hackathon event, but I am sure others will come up with even more innovative technologies to help improve the way the city delivers services now that he has set the bar for everyone.

When Houstonians are allowed to leverage technology to more efficiently access the benefits of city services, that makes for a greater Houston. It's even more awesome when it is Houstonians who are developing that technology, and it just goes to show how talented Houstonians really are.

Perhaps the city should seek to emulate the success of the hackathon event in other areas to engage Houstonians in improving the way in which the city delivers services and to seek ideas for solving other municipal dilemmas.

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Space City's Commercial Spaceport

Houston, we have a spaceport!

Congratulations to the Houston Airport System on the announcement that it has secured FAA approval for Ellington Field to become the nation's 10th commercial spaceport. Houston will now be able to boast that it is one of the only cities with both two international airports and a spaceport. It's only fitting that the city most synonymous with space exploration should have one of the nation's first commercial spaceports, and with this development we can rest assured that Houston will forever be America's Space City.

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Minimum Wage White Paper

While I certainly desire all Houstonians increase their earnings, I am opposed to Houston following the lead of many cities nationwide in increasing its minimum wage above what is already required by federal law. This is because the detriments to the many - most of all to society's most economically vulnerable - and to the overall Houston economy would clearly outweigh the benefits that would accrue to the very few. That is why I would not only be a vote against such a proposal should it come before Houston City Council – but I would use my economics background to help build a sound and reasoned case against it if I were elected. 

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Do It Right the First Time

We have too much work to do to repair our roads to have to redo work that was completed less than a year ago, and the city of Houston needs to be held accountable to be sure that the repairs we are making will last. It's very frustrating for residents who have put up with the inconveniences attenuating road construction with only the hope of a smooth new street replacing the old one that battered their vehicle on a daily basis to assuage them to then be faced with the same problems such a short time later. Even worse, it is largely a waste of scarce taxpayer dollars that the city is charged with stewarding. 

"The more than $200,000 project [to repair Dunlavy Street between Alabama and Richmond] was completed last June and in less than one year, large dips in the cracks started showing up. Residents are outraged, frustrated and are trying to understand why this road is already having problems so soon after the project ended."

When the city repairs a street it needs to do it right the first time. That would make for a Greater Houston.

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