Earlier this week, Texas Speaker of the House Joe Straus released a letter to the members of the House Appropriations Committee regarding his concerns for the state budget and the many factors that must be considered during the 85th Legislative Session that begins in January 2017.
One of those concerns is the TRS-Care retiree health insurance program. Straus stated that “even with the critical infusion of funding to TRS-Care last session, a sustainable, long-term solution is still needed.”
Straus also noted that “writing a balanced and disciplined budget that appropriately funds our top priorities is going to be a significant challenge.” As the members of the Texas Retired Teachers Association (TRTA) know, TRS-Care faces a budget shortfall of $1.6 billion next session, putting the 250,000 participants of the program at risk of skyrocketing premium increases, benefit changes, or both.
The Texas Legislature has been making TRS-Care a priority during the interim between sessions, appointing a legislative committee to review potential solutions to the fiscal issues as well as the long-term sustainability of the program. The legislative members named to this group are: Senators Joan Huffman (R-Houston) – Co-Chair, Jane Nelson (R-Flower Mound), and Craig Estes (R-Wichita Falls); and Representatives Dan Flynn (R-Canton) – Co-Chair, Trent Ashby (R-Lufkin), and Justin Rodriguez (D-San Antonio).
On March 30, the committee held its first hearing to discuss TRS-Care, which TRTA reviewed in the Inside Line. During the meeting, each legislator was divided on how to approach the conversation of solving the TRS-Care crisis.
Senator Craig Estes (R-Wichita Falls) began the meeting by providing a statement of determination, but halfway through conceded that solving the crisis would require everyone to contribute.
Representative Phil Stephenson however was adamant that retirees should not have to have any cost increases or benefit reductions. “It should be the burden of the actives and the state,” Stephenson said.
Tim Lee, TRTA’s Executive Director, outlined the issues surrounding the program, including the prolonged issue of the program being a “pay-as-you-go strategy.” This current strategy required the state to provide $768 million to keep the program solvent through the current biennium, which is what Speaker Straus was referencing in his press release.
The bottom line is this: more revenue is needed to keep TRS-Care solvent. The current pay-as-you-go method has almost been as expensive as a pre-funded method. A pre-funded method would be similar to the TRS pension fund, which receives yearly contributions from the state, active educators, and school districts.
While pre-funding TRS-Care is the best option for its long-term solvency, and the method that would be most fair to plan participants, it is the most expensive option for the Legislature. It would cost the state a total of $2.7 billion during the 2018-19 biennium and $2.8 billion during the 2020-21 biennium to pre-fund TRS-Care.
Achieving pre-funding might be a lofty goal, as Straus indicated that the state sales tax has “registered five monthly declines,” and crude oil prices are averaging $37 per barrel, down from $60 per barrel. While Straus noted that Texas is “better able to weather the peaks and valleys of a volatile energy market,” he warned that Appropriations Committee members will have to make difficult choices to balance the state’s budget.
Though most education associations in Texas concurred that pre-funding was the best option for TRS-Care, the reality of how the fiscal issues with the program will be resolved remains to be seen, and will be a point of contention during the 85th Legislative Session.
The fact is that TRTA and our members are leading on this issue. We are grateful for the attention being given to TRS-Care; TRTA knows that we have many friends in the Texas Legislature. The solution to this difficult problem may include different benefit strategies; however, TRTA believes that no matter what may be discussed regarding the health care plan, a serious discussion on additional state revenue is needed to keep this plan intact now and for the future.
Said more simply, TRS-Care is out of money and all public education retirees participating in TRS-Care need to join TRTA in this fight for additional state funding!
Please encourage your fellow retirees, friends, and colleagues to become a member of TRTA as we work to protect your TRS-Care health insurance program. Click here to join TRTA or renew your membership!
Flooding Impacts Greater Houston Area
TRTA has thousands of members that reside in the Houston area. As you may have read in the newspaper or heard about on television, Houston and surrounding areas have experienced severe flooding as a result of torrential rains over the past several days.
At this time, we would like to remind all of our members that our charitable partner organization, the Texas Retired Teachers Foundation (TRTF), has a program to assist Texas public education retirees financially during critical emergencies. “A Helping Hand” began in 2010, and has assisted 88 retirees with over $84,000 in grants since that time.
TRTF is calling on members of TRTA to make donations to the program in anticipation of receiving applications for assistance. Members may donate online or call the TRTA state office at 1.800.880.1650 and ask to speak with the accounting department.
TRTF is also calling on members to let the organization know of any retirees who may need assistance. Applications for assistance are available by sending an email to firstname.lastname@example.org or calling 1.800.880.1650 and asking for Cindee Sharp. The program may be able to help retirees with purchasing food, performing home or car repairs, or with lodging due to displacement.
Thank you for spreading the word about “A Helping Hand.”
Thank you for your membership to TRTA. We will continue to follow the progress on TRS-Care, and provide you many more opportunities to get involved!