Executive Summary:
- HJR 2 would authorize retired educators to receive a cost-of-living adjustment (COLA) funded by state appropriations based on the work in the 88th Legislative Session and the Teacher Retirement System of Texas (TRS) pension fund currently being actuarially sound.
- The COLA and supplemental payment will cost approximately $5 billion. The Legislature would fully fund both, and the enhancements will not impact the actuarial condition of the TRS fund.
- As a budget matter, HJR 2 requires constitutional authorization because the amount the Legislature wants to fund is greater than the amount the state is allowed to spend per the state’s constitution, which means it needs to be on the ballot in November 2023.
- The proposed ballot language according to HJR 2 is: “The constitutional amendment authorizing the 88th Legislature to provide a cost-of-living adjustment to certain annuitants of the Teacher Retirement System of Texas.”
- The final percentages of the COLA and supplemental payment amounts are still not finalized, which is what is being negotiated in Senate Bill 10 via conference committee.
- TRTA is working with the Legislature to get the largest increases, for the most people, in the quickest way possible.
The Texas Retired Teachers Association (TRTA) reported last week that the Senate Finance Committee was working on a revised version of HJR 2, a measure that would require constitutional authorization for the Legislature to fund a cost-of living-adjustment (COLA) for eligible Teacher Retirement System of Texas (TRS) retirees.
The Texas Senate did not originally seek constitutional authorization. However, constitutional authorization is necessary for the Legislature to fully fund a COLA and avoid any issues with the state’s constitutional spending cap limits.
While details on both a COLA and supplemental check have not been finalized, the reported total investment in TRS retirees benefit increase this session is now $5 billion. By the Texas Legislature fully funding the COLA and supplemental check from state resources, the Legislature can avoid using money from the TRS trust fund.
Yesterday, May 22, Senator Joan Huffman, upon laying out HJR 2 to the full Senate, said the HJR would constitutionally dedicate a one-time appropriation to TRS to fund a COLA for eligible TRS annuitants.
Huffman said, “We are asking the voters to agree to constitutionally dedicate billions of dollars towards a COLA.” The amount to fund the COLA alone is equal to more than $3.3 billion.
Huffman also introduced an amendment from the floor, saying that it “takes care of some of the concerns of retirees” and “ensures that the COLA will be granted definitely if approved by the voters” in November. The amendment adopted yesterday states that the COLA would be based on the TRS actuarial valuation that was done on February 28, 2023, when the system was considered actuarially sound by state law. That valuation is still valid today.
Last week, TRTA had raised concerns that the language in the HJR did not clearly state that the TRS fund was actuarially sound when the Legislature approved the plan to help retirees. Lt. Governor Dan Patrick and Chair Huffman both worked with TRTA to address these concerns, as well as make other technical improvements to HJR 2.
If the voters approve this constitutional authorization, eligible TRS retirees will receive whatever COLA percentage is approved in the final version of SB 10. A conference committee is still working on the final details of SB 10.
Huffman reminded the Senators that the HJR is a vote for funding the COLA, but that the proposed supplemental payments (also referred to as stipends) are subject to the final passage of SB 10 and the state’s proposed budget bills. Therefore, the supplemental payments would not be subject to a vote and would be provided to TRS retirees regardless of the status of the constitutional amendment.
Before the final passage of HJR 2, Huffman said that the bill is “an investment in our retired teachers…we are proud to do that.”
HJR 2 passed the Senate unanimously with 31 ayes and no nays.
What’s Next?
HJR 2 returns to the Texas House of Representatives for consideration. HJR 2, as a joint resolution adopted by the Legislature, will not be submitted to the Governor for signing once passed. Instead, it will be filed directly with the Secretary of State.
Additionally, SB 10 is still under consideration by the conference committee. The conferees appointed to negotiate the final version of SB 10 are: Senators Joan Huffman (Chair), Donna Campbell, Juan “Chuy” Hinojosa, Lois Kolkhorst, and Robert Nichols, as well as Representatives Greg Bonnen (Chair), Giovanni Capriglione, Barbara Gervin-Hawkins, Oscar Longoria, and Gary VanDeaver.
Members, as a reminder, there are still steps that need to be taken to pass a bill for TRS retirees. With less than one week left in the 88th Legislative Session, things may still change with bill language. We expect to go until the end of session before a final version of HJR 2 and SB 10 are passed and before we know with absolute certainty what percentage of COLA and what amount of supplemental payment may be included.
Final Comments
TRTA knows our members have many questions about the HJR, the COLA, and the supplemental payments. These last few days of legislative session will determine the benefit increases retirees may receive after this session.
We are working to get the largest increases, for the most people, in the quickest way possible. Additionally, TRTA is working to address some other questions and concerns. For now, we are focused on finishing the session to achieve the best option for TRS retirees.
As always, TRTA has pledged to do the most that we can for our members. We ask that you please consider renewing your membership in TRTA as we enter the final week of session and prepare for whatever comes next as we endeavor to win in all our efforts.
