Moody's Warns of Houston Credit Downgrade if Austin Nixes Pension Plan
Mayor Sylvester Turner is warning that Houston's credit rating could drop if the Texas Legislature fails to approve the city's proposed pension plan.
Moody's Investors Service currently rates Houston as Aa3 with a negative outlook, noting that despite having a large and growing regional economy, the city has one of the largest unfunded pension liabilities in the United States. Houston has a $3 billion general obligation debt right now, but looking toward the future, the city's unfunded pension liabilities exceed $8 billion.
The credit agency is waiting to see how things shake out in Austin before revising its rating for Houston.
Mayor Turner is trying to pressure lawmakers at the capitol to approve his pension reform plan, which gives the city more flexibility to manage the retirement funds of municipal employees and reduce costs to city taxpayers.
Read more: http://www.houstonpress.com/news/houstons-credit-rating-hinges-on-pension-plan-9349295