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Legislative Updates

Legislative Update No. 33, Session 80
By Tim Lee, Executive DirectorPrinter Friendly ||| Print as PDF

April 13, 2007

Senate Adopts Budget, McClendon Bill Moves Forward, P&I News

TRS would receive lower State contribution under Senate Budget

The Texas Senate adopted a budget proposal that guarantees less money for TRS pension fund, but leaves the door open for alternative revenue sources. The budget proposes a baseline budget amount for TRS of 6.4%. This is 0.3% less in state contribution than what was adopted by the House. The Senate version provides opportunities to implement new funding sources that are dependent on the passage of enabling legislation. The intent of that legislation is to bring school districts into the TRS funding mix and use that new revenue source, in combination with the State and active member contribution, to make the TRS System sound and provide a pension benefit increase for retired educators.

SB 1846 is the bill that would bring the school districts in as a TRS funding source. School districts already do pay some contributions into the System on employee salaries that exceed the State base minimum, as well as the contributions for an employee’s first 90 days of employment, but this change would be in addition to those current contributions. This legislation is still pending in the Senate State Affairs Committee for further action.

The budget bills will now move to a legislative conference committee and debate will ensue about what TRS may actually receive in the State budget.

TRTA certainly supports the House version of the budget proposal that provides for a 6.7% State contribution that gets the System actuarially sound and provides additional funding for a one-time 13^th month check.

TRTA continues to persuade decision makers that the best budget scenario proposal, though, would provide enough funding for TRS pension fund soundness and to provide an ad hoc cost of living raise for TRS annuitants.

McClendon Press Conference

Representative Ruth Jones McClendon will host a press conference next Monday, April 16, 2007, in advance of her legislation, HB 1105, being heard on the House floor. This legislation calls for a State contribution level of 6.7%, and provides the necessary trigger language authorizing the TRS Board of Trustees to provide a 13^th month check to TRS annuitants in September 2007.

Representative McClendon has asked TRTA and a number of other constituent groups to appear at the press conference in support of this important legislation.

HB 1105 should be heard on the House floor Monday, and TRTA members are encouraged to contact their House legislators and ask them to vote for HB 1105! As always, TRTA members can use the TRTA Call Your Legislator Hotline at 1.888.674.3788.

House Pensions and Investment Committee News

This week, the House P&I Committee worked on several bills pertaining to TRS. One of those bills is HB 2365 by Truitt. This is the GASB-alternative bill that attempts to rebut the new GASB Rule 45 regarding the reporting of costs associated with other post employment benefits (OPEB). The bill, if adopted, could save the State billions of dollars that may be necessary to pre-fund OPEB costs decades before these health benefits are ever used by future government employee retirees. GASB 45 does not just threaten health insurance benefits for future retirees, it also poses a real danger to current retirees’ benefits being slashed or completely eliminated due to a lack of state dollars to pay both for current costs and future projected liabilities. TRTA will be monitoring this bill closely and working to get it to the House floor as soon as possible for consideration.

The House P&I Committee will hold a public hearing next Tuesday, April 17, 2007 on the issue of “public pension plans and social investing.” There have been a number of bills filed that may require the pension system to divest in certain areas, or markets, around the world. There is also discussion about how far the legislature should go in telling public pension plans how to invest their trust fund assets. Next week’s hearing will review the issue of “social investing” and/or divestiture and the impact these issues may have on the large public pension plans in Texas. TRTA will attend this special hearing and report back on the committee’s actions.

Concluding Thoughts

The TRTA 54^th Annual Convention will begin this weekend, officially convening on Sunday, April 15. Over 920 TRTA delegates will attend the event (this does not include any guests that may be coming with them!). The TRTA staff is working hard to make this an enjoyable event for all of you who may be coming.

Making this event even more special will be the TRTA Legislator Appreciation Breakfast. So many legislators have agreed to participate in this grand event. At last count, 100 legislators and guests will be joining their retired educator constituents for a very enjoyable morning. If you are planning on attending the Legislator Appreciation Breakfast, please be sure to welcome our honored guests by letting them know how much we appreciate their service and that we look forward to their continued support on TRTA issues this session.

There has been an overwhelming response to the request for TRTA members to send us their stories about how the GPO and the WEP have impacted their lives. Please feel free to continue to send those stories to us and we will forward them to Congressman Doggett for his review.

Thank you for all the work you are doing to help TRTA.

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