COMMITTEE APPROVES BONUS CHECK FOR RETIRED TEACHERS
(AUSTIN) — Retired public school teachers, administrators and staff would get a 13th check this year under a bill approved unanimously by the Senate Finance Committee on Friday. SB 7, by Houston Senator Joan Huffman, would send all retired members of the Teacher Retirement System of Texas a bonus check equal to their monthly annuity or $2,400, whichever is less. This bonus would cost the state just over $700 million in general revenue. "Remember that we are not just talking about teachers -TRS also serves our librarians, our school nurses, counselors, custodial and support staff, bus drivers among other public education positions, all important people in the public education process." said Huffman. "We are so grateful for the work that they do for us and the children of this state."
This legislation comes two years after the Legislature passed sweeping reforms to the system, the sixth largest pension fund in the US, and one that serves almost half a million retired public school employees in Texas. In 2019, the fund was in dire straits, with more than $47 billion in existing unfunded liabilities and on a path to see that number grow to $124 billion by 2050 absent legislative action. That year lawmakers approved a plan that increased state and member contributions over the next few years and successfully moved the fund into solvency. “I’m pleased to report that that fund is now on a stable path, paying down the unfunded liability, it’s actuarially sound with a funding period of 26 years and reached an all-time high last week of 185 billion dollars,” Huffman told members at an April Finance hearing dealing with similar, though smaller, problems with the state's general employee retirement fund. The Legislature also took action to move that fund into solvency this session.
Because the state constitution forbids pension benefit enhancements when a fund lacks actuarial soundness - that is the ability to pay for all of its obligations within 31 years - 2019's TRS reform opened the door for this bonus check. More than that, Huffman told members they should consider a cost-of-living adjustment increase when the Legislature meets again in regular session in 2023. "It looks like investment returns are up and we'll be in a position where we know we have a contribution level that we hope can keep the system actuarially sound," she said. The special session agenda set by Governor Greg Abbott only allows for legislation related to this bonus check.
The state has even more money to work with than when the regular session ended in May, giving lawmakers discretion to pay out this bonus. Earlier this week, state Comptroller Glenn Hegar once again revised his revenue estimate upwards, forecasting a $7 billion balance in the state treasury as the fiscal year draws to a close in September, up from a May estimate of $725 million. "We came into a bit of extra money," said Flower Mound Senator and Finance Committee Chair Jane Nelson. "There are a lot of things we could have done with that extra money and one of the priorities that was set was making sure we were doing something for our retired teachers."
The Finance Committee on Friday also considered the reinstatement of funding for the legislative branch of the 2022-2023 state budget. Governor Greg Abbott used a line-item veto to zero out Article X spending following a walkout in the waning hours of the regular session that resulted in the death of the session's marquee elections bill in the House of Representatives. "Funding should not be provided for those who quit their job early," wrote Abbott in his veto statement. The bill heard Friday, SB 10 by Nelson, is identical to the version included in the budget passed during the regular session, and would allocate $315 million for the operation of the Legislature and associated agencies like the Legislative Budget Board and the Texas Legislative Council through 2023. Unless this bill is passed and signed by the governor, funding for these agencies would end with the current biennium on September 1st.
The Senate will reconvene Monday, July 12 at 10 a.m.