Analyst fears widespread repercussions from court-ordered tax to fund pensions in Harvey
An appellate court's decision to order the City of Harvey to levy a tax to supply its firefighters’ pension fund has set a frightening precedent, Wirepoints founder Mark Glennon contends.
The First District Appellate Court ruling determined that the pension, which is 27 percent funded, is on the verge of default and that it was appropriate for the court to step in and order that the property tax be levied. The decision partially relied on an analysis of the finances of the city, which Glennon called far beyond insolvent.
“To put this more simply, we have a court now ordering blood out of a turnip," Glennon wrote on the Wirepoints website. "Harvey is broke and property in Harvey is already obscenely overtaxed. But it’s the very fact that Harvey is a bloodless turnip that helps makes it subject to court-ordered tax. Because they can’t pay, they have to pay, according to the court’s thinking.”
Glennon raised several concerns about the ruling, ncluding what circumstances amount to a pension fund being considered on the verge of insolvency. As he notes, the firefighters’ pension in Harvey is better funded at 27 percent than many others in the state, though the city’s finances are in extremely bad shape.
“Keep thinking about this path the court has put us on and you’ll come up with more questions," he wrote. "Does the precedent apply to all municipalities or just home rule ones? Do property tax caps now in place trump the court’s decision or vice versa? Are there implications for the state’s own pensions? I don’t know.”