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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