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Could Houston Become Another Detroit?

Could Houston Become Another Detroit?

Moody’s Investors Service recently affirmed the City of Houston’s Aa2 credit rating. It’s a good grade, based on a generally robust economy. But Moody’s also changed its outlook for Houston from “stable” to “negative.” Why? The city’s growing pension costs — $3 billion and counting.

Houston is hardly the only city in America facing looming pension obligations, and it’s not a new problem for the Bayou City. Some point to Detroit — which started down a similar path 45 years ago and is mired in horrid financial straits today — as the cautionary tale Houston does not want to emulate. That begs the question: could Houston be another Detroit, in terms of its financial situation?

We consider that question, examine the city’s pension problems and possible solutions, and look at what other cities and states are doing to deal with their pension issues.

We hear from: Lawrence McQuillan, Senior Fellow at the Independent Institute and author of California Dreaming, Lessons on How to Resolve America’s Public Pension CrisisRonald Green, Houston’s City Controller; and Steven Craig, an economics professor at the University of Houston.

About the Author

Michael Hagerty

Michael HagertyMichael Hagerty is the Senior Producer for Houston Matters. He has a degree in journalism from Abilene Christian University and has served as news director for NPR and PBS stations around Texas and The West, including: KUNR-FM in Reno, Nev.; KNPB-TV in Reno, Nev.; and KWBU-TV/FM in Waco, Texas. He got his start on the air as a college student hosting Morning Edition at KACU-FM in Abilene, Texas. A native of the Chicago area and an avid Cubs fan, Michael spent four seasons as the public address announcer for the Reno Aces, the Triple-A affiliate of the Arizona Diamondbacks.View all posts by Michael Hagerty →