Will Dallas’ Police Pension Problems Crowd Out Spending on Streets, Parks and Libraries?

**Booming Dallas has something to worry about: a pension contagion.The local economy has stormed back from the recession, and Dallas has grown its tax base for five consecutive years. In fiscal 2017, it grew an impressive 10 percent, outpacing the rate of many neighboring cities.But the escalating financial problems at the Dallas Police and Fire Pension System are threatening that momentum.The pension already consumes $125 million a year in taxpayer money (and growing), and that’s not enough to keep it solvent. The unfunded liability, now over $3.5 billion, is so large that the city’s credit rating has been cut by three major rating agencies.Each has a negative outlook, an indication of the pension risk.S&P Global Ratings downgraded Dallas twice. If the city cannot agree on a fix with public safety workers and the Legislature in Austin, Dallas’ credit rating could be lowered “multiple notches,” the agency said in January.That would mean higher borrowing costs just when the city is planning to borrow a lot more. Dallas already faces higher annual contributions to the pension and higher pay for police and firefighters. At some point, these expenses could suck up dollars intended for streets, parks, libraries and the like.  Continue reading...