From :After a series of bad gambles on real-estate investments and a history of mismanagement, the Dallas Police and Fire Pension system has amassed $2 billion in liabilities. In a panic, employees have been pulling out their money 鈥� a move that could .
But this isn鈥檛 only a problem for Dallas. Pension funds are causing problems nationwide. Texas State Comptroller says it鈥檚 not the first Texas city where this has happened. It鈥檚 also happened in Houston.
"Not enough money is coming in today to be able to pay the benefits out over time in the long run,鈥� Hegar says. 鈥淧lus in today's investment environment, the last several years the assumptions of making 8-plus percent returns every year have not quite been there. So that causes even more of a problem."
Dallas鈥� and Houston鈥檚 problems could have an effect statewide, Hegar says, even though the money isn鈥檛 on the state鈥檚 balance sheets. The two cities鈥� could get downgraded 鈥� which wouldn鈥檛 affect the state鈥檚 credit rating, but would still have an overall negative effect. Hegar says people might start shying away from moving to Houston or Dallas, two of the biggest economic engines in the state.
Houston is already working to amend the problem. One fix on Dallas鈥� table is a potential bailout from the state. Hegar says although that option is a long way off, if it were to happen, the request would not be well-received.
"There are 254 counties across the state of Texas. Those legislators representing places other than Dallas are wondering 鈥榃hy should my taxpayers bail out problems in Dallas,鈥欌�� Hegar says. 鈥淭hat's why it really needs to be dealt with. ... It is very critical and important that Dallas comes together with solutions ... so Dallas can move forward and move away from this cloud hanging over them."
Post by Beth Cortez-Neavel.
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