Category Archives: TRS

Here’s how TRS legislation ended up in the 86th legislative session

As the 86th legislative session came to a close yesterday, there were some significant changes made to the Teacher Retirement System (TRS) that warrant a closer look.

TRS Pension Reform

Senate Bill (SB) 12 by Sen. Joan Huffman (R – Houston), sponsored in the House by Rep. Greg Bonnen (R – League City), was passed 31:0 in the Senate and 145:1 in the House on the last day to pass bills. The bill will immediately reduce the funding window on the Teacher Retirement System (TRS) pension from over 90 years to pay off the unfunded liability to under 30 years. Reducing the time frame to less than 30 years also allowed the legislature to provide current retirees with an additional pension payment during the current fiscal year. The 13th check, as the supplemental payment is often called, will be the amount of the retiree’s regular monthly annuity payment up to a maximum amount of $2,000.

ATPE was strongly in support of shoring up the TRS pension fund as it will ensure that the primary retirement income for many Texas educators will be viable for decades to come. The passage of SB 12 also saves the state and taxpayers hundreds of billions of dollars in interest on the pension fund’s liabilities, and it puts the TRS fund in a position for policymakers to begin considering a permanent cost of living adjustment for retired educators as early as the next legislative session in 2021.

SB 12 calls for the state’s contribution to immediately increase from 6.8% to 7.5% in the 2020 fiscal year, which begins on Sept. 1, 2019. The state contribution rate will then continue to increase over time until the rate reaches 8.25% in 2024. School districts not paying into Social Security currently contribute 1.5% to the pension fund. Beginning in the 2019-20, all school districts will contribute toward TRS pensions with the district rate increasing by a tenth of a percent each year beginning in the 2021 fiscal year, until the district rate reaches 2% in 2025.  Active school employees’ contributions to TRS will remain at their existing rate of 7.7% for the next two years. Employee contributions will increase to 8% in the 2021-22 school year and 8.25% the following year.

Aside from injecting more money into the TRS pension fund, SB 12 contains a few additional provisions that are worth noting. For one, the bill maintains a provision that ensures that if the state’s contribution to TRS should decline in the future, then school district and active employee contributions to the fund would be reduced by the same percentage. It is worth noting, however, that any future legislature could vote to change this. SB 12 also includes a change for the handful of school districts that currently pay into Social Security on behalf of their employees. As noted above, those districts that opt to make Social Security contributions will no longer enjoy an exemption from paying into TRS, which Rep. Greg Bonnen said would add about $20 million per year to the fund. Only institutions of higher education will now be exempt from participating in contributing into the TRS pension fund for their covered employees.

Here is a summary of the details provided by TRS staff on how the final adopted version of SB 12 is funded over time:

 

TRS Healthcare

ATPE hoped that the conference committees for SB 12 and House Bill 3, the omnibus school finance bill that also passed, would find better ways to help active and retired teachers deal with the rising costs of their healthcare. There were internal discussions about increasing the state share of active employee health insurance costs. Currently, the state pays $75 per month toward premiums and requires school districts to pay a minimum of $150 per month on behalf of their staff. Employees cover the rest of the cost of their health insurance premiums. SB 12 significantly increases the state’s share of contributions going into the TRS pension system, and the final version of HB 3 does require districts to spend additional dollars on employee compensation (which could include increasing the district’s share of health insurance costs). Despite these improvements, neither bill addressed the inadequacies of the state’s share of active employee premiums in the end.

State lawmakers did make good on their pre-session promises not to raise TRS-Care rates for retiree health insurance. The state budget in House Bill 1 includes $230 million in supplemental funding to cover the projected shortfall in the TRS-Care trust fund. State leaders pushed TRS not to raise rates last fall when it became apparent that the amount of the shortfall for the upcoming biennium was going to be less than originally projected. The savings were largely due a combination of successful TRS contract negotiations and favorable provisions of the federal Affordable Healthcare Act taking effect. Unfortunately, barring a substantial change in the healthcare landscape, the projected shortfall for the 2022-2023 biennium is much larger than what lawmakers had to deal with this session to address the shortfall expected for the next two years.

TRS releases ActiveCare rates for 2020

The board of trustees for the Teacher Retirement System (TRS) of Texas met in Austin this week. Of note on their agenda was a discussion of proposed TRS-ActiveCare pricing for 2020.

Overall, the premiums for all ActiveCare plans will be increased by 3.9 percent on average, which is significantly lower than market averages, with the average increase for the ActiveCare I – High Deductible plan and ActiveCare Select at 3 percent and the increase for the ActiveCare II plan at 8.9 percent.

Note: ActiveCare II was closed to new enrollees after the 2018 plan year.

You can see the exact premium increases and benefits changes for the different coverage options on the attached rate card, or for more in-depth information, view the TRS Benefits Committee board board book at pages 16-31.

If you have questions about TRS-ActiveCare plans, visit the TRS-ActiveCare web page or call 1-800-222-9205.

Teach the Vote’s Week in Review: March 29, 2019

Here’s your weekly wrap-up of education news from ATPE Governmental Relations:


The Texas House of Representatives debated its budget bill, March 28, 2019.

During a late night floor session on Wednesday, the Texas House unanimously approved a $251 billion state budget billHouse Bill (HB) 1. The bill includes a $9 billion appropriation for improving the state’s school finance system and providing property relief to homeowners. The public education-related funding increases in the House budget would be implemented via HB 3, Chairman Dan Huberty’s (R-Kingwood) omnibus bill that ATPE supports. The full House is slated to debate HB 3 on the floor next Wednesday, April 3.

On the other side of the Capitol, the Senate Finance Committee is preparing to approve its budget bill, Senate Bill (SB) 1, in the coming days. During a meeting yesterday, the committee decided to add money to its bill to match the House’s $9 billion funding proposal for public education. The two chambers are likely to disagree, however, on how that money should be spent.

Read more about the House’s big budget vote in this article from The Texas Tribune republished on our Teach the Vote blog. We urge ATPE members to use our convenient tools on Advocacy Central to send a message to House members thanking them for their vote on the budget to increase public education funding and urging them all to similarly support HB 3 next week.


ATPE State President Byron Hildebrand testified before a House committee, March 26, 2019.

This week two important bills affecting the Teacher Retirement System (TRS) advanced in both the House and Senate.

House Bill (HB) 9 by Rep. Greg Bonnen (R-Friendswood), which increases contributions to TRS and provides retirees with a 13th check, received a hearing the House Committee on Pensions, Investments, and Financial Services on Tuesday. The bill was left pending in  committee but is expected to be voted out favorably in the near future. ATPE State President Byron Hildebrand testified in favor of HB 9 during the hearing.

Also, Senate Bill (SB) 12 by Sen. Joan Huffman (R-Houston) was voted out of the full Senate by a unanimous vote on Monday. SB 12, which ATPE also supports, raises the contribution rates into TRS, albeit differently from the House’s bill, and provides retirees with a 13th payment, but the payment would be lower. For more information on the differences between the two bills, check out this blog post by ATPE Senior Lobbyist Monty Exter.


On Tuesday, the Senate Education Committee chaired by Sen. Larry Taylor (R-Friendswood), heard a number of bills focused on student discipline issues. ATPE supported bills such as Senate Bill 1451, which prohibits negative action on a teacher’s appraisal solely on the basis of the teacher’s disciplinary referrals or documentation of student conduct, and Senate Bill 2432, which would add harassment to the list of conduct that will result in the mandatory removal of a student from the classroom. For more information on the bills heard, plus other pending bills that were voted on during this week’s committee hearing, check out this blog post by ATPE Lobbyist Mark Wiggins.


Meetings of the House Public Education Committee have been known to take on a theme and focus on bills that pertain to the same issue. The theme of this week’s meeting of the committee was school safety. Members of that committee on Tuesday heard 35 bills related to topics in school safety such as school hardening, access to mental health resources, and increased law enforcement on school campuses. ATPE registered a position in support of six bills including House Bill 2994 by Rep. James Talarico (D-Round Rock), which would require the Commissioner of Education to develop mental health training material for school districts. A thorough breakdown of the bills heard during this committee meeting can be found in this blog post by ATPE Lobbyist Andrea Chevalier.


FEDERAL UPDATE: On Thursday, March 28, 2019, U.S. Secretary of Education Betsy DeVos sat before the Senate Appropriations Committee to defend President Donald Trump’s proposed federal budget for the Department of Education. DeVos faced questions on her support for increasing federal funding for school choice while eliminating or decreasing funding aimed at teacher effectiveness, special populations, and loan assistance. Watch more coverage of the hearing here for the full scoop.


ELECTION UPDATE: The 86th Texas Legislative session is more than halfway over, and issues like school finance, teacher pay, and school safety remain key topics. This is a direct result of the tremendous educator turnout during the 2018 elections and proof of the power of democracy – informed and engaged citizens holding their elected officials accountable. Practicing and modeling civic engagement require voting in every election. On May 4, 2019, many Texans will have the chance to vote in local elections for school boards, mayoral seats, bonds, and more. Make sure your voter registration is up to date so you will be able to participate. The last day to register to vote in the May election is April 4. Early voting runs April 22-30, 2019. Visit VoteTexas.gov to learn more about how to register and vote.

TRS bills move forward in both chambers

ATPE State President Byron Hildebrand testified in the House Pensions Committee, March 26, 2019.

The 86th Legislature has been considering bills to increase contributions to the Teacher Retirement System (TRS), which ATPE supports. Preserving the solvency and defined-benefit structure of the Teacher Retirement System (TRS) pension program for educators is an ATPE legislative priority this session.

On the Senate side, one high-profile measure on the move pertaining to this priority is Senate Bill (SB) 12 by Sen. Joan Huffman (R – Houston). After the bill received approval last week from the Senate Committee on State Affairs, which Sen. Huffman chairs, the full Senate passed SB 12 unanimously out of the upper chamber on Monday, March 25, sending it on its way to the House.

Meanwhile, a House committee today heard its own version of how to increase financial support for TRS, as well as for the state’s current retired educators. House Bill (HB) 9 by Greg Bonnen (R – Friendswood) was heard this morning by the House Committee on Pensions, Investments & Financial Services. The bill was left pending in committee today but is expected to receive a favorable committee vote in the near future.

Byron Hildebrand

ATPE State President Byron Hildebrand delivered our association’s testimony strongly supporting HB 9 in committee today. Hildebrand, who is also a retired educator, thanked legislators for taking a positive step forward with legislation aimed at making the TRS pension found sound, and he encouraged lawmakers to continue to take steps to do great things for active and retired teachers. Click here to watch today’s committee hearing, where HB 9 was the first bill considered. (Hildebrand’s testimony begins at approximately the 43-minute mark in the archived broadcast.)

While SB 12 and HB 9 both increase contributions to TRS and provide a 13th check to current retirees, the bills differ on the amount of the increased contribution, who would pay for it, and the size of the 13th payment. At 2.5%, the overall increase in TRS contributions under SB 12 would be a half percent more than the 2% increase called for by HB 9. However, HB 9 puts the responsibility for paying for the entire contribution increase on the state by raising the state’s rate from 6.8% up to to 8.8%. SB 12 only raises the state’s contribution rate from 6.8% to 8.25%, while also raising the active member rate from 7.7% to 8.25%, and raising the school district contribution rate from 1.5% up to 2%. HB 9 also begins and finishes raising the contribution rate a year sooner than SB 12 would. In terms of 13th payments, SB 12 offers all retirees a $500 bonus, while HB 9 would provide current retirees a 13th check in the same amount as their regular monthly annuity up to $2,400.

Stay tuned to Teach the Vote for updates on these two ATPE-supported bills as they continue to move through the legislative process.

Teach the Vote’s Week in Review: March 22, 2019

Here’s your weekly wrap-up of education news from ATPE Governmental Relations:


Now that the bill filing deadline has passed and the 86th legislative session is beyond its halfway point, it’s time for the legislature to do the one thing that it is mandated to do in every session: pass a budget. “Budget Day,” though it doesn’t have an official date in each legislative session, is when the House or Senate passes its version of a budget bill. Things get heated, legislators stay on the floor until the wee hours of the morning, staving off delirium to fight for every penny possible for their constituents’ legislative priorities. At stake this session is the future of public education funding, deemed an emergency issue this session by Gov. Greg Abbott and a top priority of the leadership in both the House and Senate.

For its part on the school finance front, the House Public Education Committee unanimously approved Chairman Dan Huberty’s (R-Kingwood) comprehensive school funding bill, House Bill (HB) 3, on Tuesday of this week after making a number of changes requested by ATPE and other education stakeholders. Those changes included removing a controversial merit pay proposal from the bill. Read more about the revisions made to HB 3 in this blog post by ATPE Governmental Relations Director Jennifer Mitchell. The new and improved school finance and tax reform bill is expected to be brought up by the full House for a floor debate within a couple of weeks.

With the momentum behind major public education bills like HB 3, it is now up to lawmakers to put aside enough money for the next biennium to make those school funding proposals a reality. On the House side, those budget decisions will be made via HB 1, which is the House’s version of the budget bill that is scheduled for a floor debate next week. State representatives will be spending the weekend drafting and pre-filing their amendments to the massive budget bill before its lengthy budget debate happens on Wednesday, March 27. Stay tuned to Teach the Vote and be sure to follow us and our lobbyists on Twitter for updates on the budget debate next week.

 


House Public Education Committee hearing, March 19, 2019

In addition to approving HB 3 earlier this week, the House Public Education committee also heard 21 other bills when it met on Tuesday, March 19. The subjects of the bills ranged from the compensatory allotment to  a proposal to make personal financial literacy courses mandatory for graduation. The committee also voted to send 14 previously heard bills to the House floor, including the high-profile school finance and tax relief bill, HB 3. For more information on the bills heard during Tuesday’s committee meeting, read this blog post by ATPE Lobbyist Andrea Chevalier. Next Tuesday, the committee will meet again to hear a long agenda full of school safety bills.

Senate Education Committee hearing, March 19, 2019

The Senate Education committee also met Tuesday, March 19, to hear a number of bills, including several relating to educator misconduct. Most of the bills heard on that subject were filed by Sen. Paul Bettencourt as follow-ups to his Senate Bill 7 enacted by the legislature in 2017. The Senate Education Committee voted to advance three bills to the Senate floor. Read more in this blog post from ATPE Lobbyist Mark Wiggins. On the agenda for next week’s Senate Education Committee hearing are several bills relating to student discipline.

 


Two high-profile bills positively affecting Teacher Retirement System (TRS) pension benefits are slated for legislative action next week.

First, Senate Bill (SB) 12, by Sen. Joan Huffman (R-Houston) is on the calendar for debate by the full Senate next week. As we reported in last week’s wrap-up, SB 12 was previously heard and approved by the Senate State Affairs Committee. SB 12 would shore up the educator pension fund by gradually increasing what the state, school districts, and educators contribute to TRS over a period of six years.

The second bill is House Bill (HB) 9 by Rep. Greg Bonnen (R-Friendswood), which is scheduled for a public hearing by the House Pensions/Investments/Financial Services Committee on Tuesday morning, March 26, 2019. ATPE will be testifying in support of the bill. HB 9 would increase contributions to the TRS pension fund placing the entirety of the responsibility of paying for the contribution increase on the state. It also provides for TRS retirees to receive a 13th check equal to up to $2400 of their annuity payment.

Despite their different methods, both of these ATPE-supported bills are aimed at making the pension fund actuarially sound, which would make it possible for the state to provide a much-needed cost of living adjustment to those retired educators who are receiving TRS benefits.

 


Teach the Vote’s Week in Review: March 15, 2019

Here’s your wrap-up of education highlights from another busy week for the ATPE Governmental Relations team:


ATPE Senior Lobbyist Monty Exter testifying before the House Public Education Committee on March 12, 2019

Members of the House Public Education committee heard more than 12 hours of testimony this Tuesday on House Bill 3 (HB 3), the House’s comprehensive school finance reform bill. Stakeholders from parents to teachers and even children on spring break testified about the $9 billion bill. Many witnesses at Tuesday’s hearing expressed support for the bill, but a number of them shared reservations about its move to roll funding for gifted and talented programs into the basic allotment and a proposed merit pay plan that the commissioner of education would oversee under HB 3 by Rep. Dan Huberty (R-Kingwood).

ATPE testified neutrally on HB 3 stating that while the bill as filed has many positive qualities and would inject much-needed funding into the public education system, it also includes some troubling changes regarding the state’s minimum salary schedule and using teacher evaluations and student performance data for merit pay. Many witnesses, including ATPE, who expressed concerns about the merit pay plan noted that it would be difficult if not impossible for the commissioner to determine which teachers might receive merit pay under HB 3 without using data from student test scores, even though the bill itself does not specifically call for the use of the STAAR for this purpose. ATPE opposes the use of student performance data, including test scores, as the primary measure of a teacher’s effectiveness for purposes of compensation, which ATPE shared with the committee during our testimony that was delivered by Senior Lobbyist Monty Exter on Tuesday.

Currently, HB 3 is still pending in committee with a substitute version of the bill expected to be discussed next Tuesday, March 19. Read more about Tuesday’s school finance hearing in this blog post by ATPE Lobbyist Andrea Chevalier.

On Wednesday, the House Public Education Committee reconvened to hear a host of other bills related to topics such as Districts of Innovation (DOI) and school start dates. ATPE Senior Lobbyist Monty Exter testified in support of HB 1051, a bill that would make permanent the Goodwill Excel center permanent, a charter school offering a successful dropout recovery program for adult students. ATPE also supported HB 340 relating to full-day pre-k and HB 1276 relating to educator certification. More details on bills heard during Wednesday’s hearing can be found here.

 


Earlier this week, the White House released the president’s 2020 budget proposal, which is little more than a statement of the president’s priorities given that Congress actually passes the federal budget. The proposal would cut billions from the Department of Education’s budget compared to what Congress previously enacted, while funding controversial programs such as school privatization and performance-based compensation. Read a more detailed analysis of the President’s budget proposal on our Teach the Vote blog here.

 


The Senate State Affairs Committee met Thursday morning to hear a number of bills. Among them was Senate Bill 12 by Sen. Joan Huffman (R-Houston). SB 12 would increase the TRS contribution rate and get the fund back to a point of actuarial soundness by the end of the biennium. In addition to the increased contribution rate, the bill would also fund a small 13th check of $500 for current TRS retirees. ATPE Senior Lobbyist Monty Exter testified in support of the bill. For more background on why TRS contribution increases are now needed, check out this previous blog post about actions taken by the TRS board of trustees in the summer of 2018.


Residents of the San Antonio area’s House District 125 elected Democrat Ray Lopez to represent them in the House in a special election held this Tuesday. Lopez, a former city council member will be serving in the seat vacated by current Bexar County Commissioner and former HD 125 state representative Justin Rodriguez. ATPE congratulates Representative-Elect Lopez and looks forward to working with him. This election was the last in a series of special elections meant to fill seats that were vacated after last fall’s elections. As we reported last week, Houston area residents of House District 145 last week elected Democrat Christina Morales to fill the seat vacated by former representative and now Senator Carol Alvarado.

 


ThinkstockPhotos-465016790_moneyLast Friday evening the Senate released its version of a school finance reform proposal, Senate Bill 4 by Sen. Larry Taylor (R-Friendswood). While the Senate has worked diligently to pass an across-the-board teacher pay raise bill this session (SB 3), its version of a more comprehensive school finance reform plan is a little less robust than its counterpart in the House. SB 4 includes provisions for outcomes-based funding and merit pay for classroom teachers. Read more information about the Senate bill in this blog post by ATPE Lobbyist Mark Wiggins.

 


TRS board meeting in Austin this week

The Teacher Retirement System (TRS) board was in Austin for their regularly scheduled board meeting on Thursday and Friday of this week. The board kicked off its hearing with a resolution celebrating the life and service of Mike Lehr, former executive director of the Texas Retired Teachers Association with more than 50 years working as a public school educator or on behalf of active or retired public school educators.

Also of note, TRS executive director Brian Guthrie updated the board on interactions TRS has had with legislators as a part of the ongoing legislative session. TRS recently presented on its general outlook and budgetary requests before both House and Senate budget committees as well as the House Pensions Committee. The agency will still have one more general presentation to the Senate State Affairs Committee, and then the agency role will shift to assisting lawmakers more behind the scenes.

The remainder of the first day’s morning session covered topics such as internal staffing policy, customer service, and how the agency communicates with TRS members. Thursday afternoon the board underwent ethics training and had an in-depth discussion of healthcare and healthcare design related to the TRS-Care and TRS-ActiveCare insurance programs.

The board’s Friday agenda focused on the TRS investment program, including the agency’s emerging manger program, a view of national and global financial trends, and TRS’s own strategic asset allocation.

Those who are interested can watch an archive of the board’s Thursday meeting and Friday meeting.

 

Senate Finance Committee takes up public education funding in Article III of the budget

On Monday, Feb. 11, the Senate Finance committee heard testimony from the state agencies affected by Article III, the education portion of the state budget. Excluding those representing higher education, the committee heard from representatives of the Texas Education Agency (TEA) and Teacher Retirement System (TRS).

Chairwoman Jane Nelson (R-Flower Mound) opened the hearing with the Legislative Budget Board (LBB) layout of the TEA budget for fiscal years 2020 and 2021.

Sen. Nelson’s budget bill, Senate Bill (SB) 1, proposes approximately $6 billion in the TEA portion over current formula funding, including $3.7 billion for an educator pay raise and $2.3 billion for property tax relief.

Several members of the committee voiced displeasure with what they view as a mischaracterization by many in the public that the state’s share of education funding has fallen to 38 percent. The members noted that this figure only represents the state’s share of Foundation School Program (FSP) funding and that there are other state dollars being spent on public education outside of the FSP. To be fair, it is true that the 38 percent figure specifically refers to the state’s share of FSP funding and that the state also pays into other sources of school district funding, such as for facilities and TRS. However, the local share of facilities funding, for example, is much greater than the percentage that local districts pay toward FSP funding. Also, educators and school districts pay a significant percent of the money going to TRS for pension contributions and health insurance costs.

Senators also pointed out that they don’t control local property tax rates or rising property values, which under current law have pushed state general revenue funds out of public education. Both of these facts are true, but again, lawmakers have failed to modify existing formulas to drive increased state spending above what current law requires. This effectively starves public schools, leaving locally elected school boards little option but to maintain or raise their local property tax rates.

Following testimony of the LBB, Commissioner of Education Mike Morath walked the committee through the TEA presentation. The commissioner highlighted agency funding requests to deal with school safety and the agency’s special education corrective plan. The latter was necessitated by recent enforcement actions by the U.S. Department of Education and a ruling out of the U.S. Fifth Circuit Court of Appeals, both highlighting our state’s failure to properly address the needs of its special education population.

The commissioner’s testimony included a lengthy back and forth discussion with committee members on Monday. Chairwoman Nelson engaged Commissioner Morath on the topic of third-grade reading, an emphasis in the final recommendations of the Texas Commission on Public School Finance. Responding to questions about STAAR and third-grade retention, Morath pointed out that grade retention, which is no longer a mandatory result of failure to pass STAAR in the younger grades, is neither an efficient expenditure of money nor a particularly effective remediation tool.

When asked about the dual management of the Permanent School Fund, which has recently resulted in a feud between the Texas Land Commissioner and the State Board of Education (SBOE), the commissioner indicated that the current set-up probably costs the fund around $200 million a year in lost investment opportunities. Finally, in an exchange with senators about boosting performance among the state’s low socioeconomic student population, the commissioner touted the benefits of funding pre-kindergarten and Dallas ISD’s ACE model.

Next in the committee, TRS Executive Director Brian Guthrie laid out his agency’s presentation on the budget. He covered the TRS board’s action in lowering the pension fund’s assumed rate of return and the need for increased contributions to bring the fund back into near-term actuarial soundness. He also covered state cost issues related to TRS-Care and the educator affordability issues related to TRS-ActiveCare. Guthrie reiterated his agency’s request for additional staff, some of whom would be used to increase TRS customer service, while other positions would be used to bring additional investment management tasks in-house, for a projected savings of $1.4 billion over a five-year period.

Sen. Joan Huffman (R-Houston), who in addition to serving on the Finance Committee chairs the Senate State Affairs Committee, had a lengthy discussion with Mr. Guthrie. She covered last session’s TRS-Care bill, which she authored in the Senate, as well as the need for additional funding in the current budget and the need for continued reform to prevent the state from being right back in the situation it was in last session with runaway costs. Huffman then turned her attention to the pension system and discussed her plan to pass legislation that would increase contributions to the fund over a number of years. Her plan would reduce the funding period of the pension from 87 years down to 24 years and bring the plan back into a condition of actuarial soundness by 2020. Currently, the plan will not reach actuarial soundness or be able to offer retirees a cost-of-living adjustment for approximately 57 years.

After the committee concluded hearing testimony from the invited agencies, public testimony was entertained, including from ATPE Senior Lobbyist Monty Exter. Exter’s testimony focused on funding teacher compensation, the TRS pension system, and educator healthcare. He concluded by encouraging the committee to focus on equity when addressing new discretionary spending and deciding how best to go about reducing recapture and property taxes. Exter’s full testimony can be seen here (at the 2:40 mark in the broadcast).

House Appropriations hears from TEA and TRS

The House Committee on Appropriations met Monday to hear from the Texas Education Agency (TEA) and Teacher Retirement System (TRS) on the issues of school safety, school finance, the teacher pension system, and active and retiree educator health insurance. Before delving into the meat of the hearing, Cmomittee Chairman John Zerwas (R-Fulsher) also announced membership of the subcommittees that will be overseeing separate subject areas of the budget.

The subcommittee on Article III that oversees public education funding will be chaired by Rep. Greg Bonnen, and include Vice-chair Armando Walle and Reps. Mary Gonzalez, Donna Howard, Matt Schaefer, Carl Sherman, Lynn Stucky, and Gary VanDeaver.

House Appropriations Committee meeting Feb. 4, 2019

Other subcommittees include: the subcommittee on Articles I, IV, V; the subcommittee on Article II; the subcommittee on Articles VI, VII, VIII; and a new subcommittee on  Infrastructure, Resiliency, and Investment.

The committee heard first from Texas Education  Commissioner Mike Morath on the topic of school safety, including physical precautions such as metal detectors and alarms. Morath noted there is no single investment in school safety that will address all current weaknesses and that the agency isn’t and hasn’t traditionally been tasked or resourced to help districts with regard to mental health components of school safety.

TEA’s Chief School Finance Officer Leo Lopez followed with a high-level overview of how public schools are funded. Lopez explained how the basics of tax rates, weights, allotments, and adjustments work to together to create a districts M&O entitlement; facilities funding; charter funding; and recapture. Also mentioned during the discussion were statutory quirks and system complexities like the fact that the basic allotment is set in statute, but legislators each session have the option of funding at higher levels through the appropriations bill. The committee also discussed how in 2011 the legislature created a mechanism called the Regular Program Adjustment Factor that allows lawmakers to decrease the entire Foundation School Program (FSP) entitlement for every district with a single adjustment.

TR) Executive Director Brian Guthrie walked committee members through pension fund operations. Guthrie explained the TRS board’s decision to lower the assumed rate of return last summer to 7.25 percent down from 8 percent, which came as a result of market forecasts and input from the fund’s actuary. This caused the funding period for pension fund liabilities to extend from 32 years up to 87 years. Under state law, the TRS fund cannot offer a cost of living adjustment (COLA) to retirees unless the amortization period noted above is within 31 years.

Guthrie noted that the agency is requesting a 1.8 percent increase in the contribution rate in order to achieve a 30-year amortization period, which would allow for the possibility of a future increase in benefits, such as a COLA. This would cost $1.6 billion for the biennium from all funds.

Responding to a question from Rep. Giovanni Capriglione, Guthrie estimated the average pension payment for a TRS annuitant to be about $2,000 per month. This average figure covers all classes of public education employees, including auxiliary staff, such as bus drivers and custodial staff. For classroom teachers who have worked in Texas schools for 30 years, that amount is closer to $4,000 per month.

Guthrie then explained the healthcare programs under the agency’s umbrella: TRS-Care for retired educators and TRS-ActiveCare for active educators. Healthcare costs have skyrocketed in Texas, despite rising at a level slightly below the national average. This resulted in a $1 billion shortfall for TRS-Care heading into the previous legislative session, which was addressed by a temporary infusion of additional state funding, coupled with a significant increase in fees and reduction in benefits. The fund continues to run at a deficit.

Rep. Schaefer asked what impact a pay increase would have on the pension fund. Guthrie indicated that if all teachers saw a raise, there would be a negative short-term impact for TRS as a result of higher salary calculations for retiring members without the benefit of higher contributions. Guthrie suggested this could be mitigated by phasing in the salary increases’ impact on the calculation of a member’s highest five years of earnings. Guthrie suggested the short-term impact on TRS-Care would be positive.

Asked by Rep. Stucky how much it would cost to make TRS-Care sustainable, Guthrie suggested it would take more than $12-15 billion to create a corpus sufficient to produce funding as a result of investment returns. Even then, that process would take some time to get up and running. The deteriorating value of TRS-Care has led many retirees to leave the program, which exacerbates the financial stresses facing it. Guthrie added that the population was beginning to stabilize.

TRS-ActiveCare, which allows smaller and mid-size school districts to enjoy the benefits of group coverage through a combined risk pool, also faces affordability challenges due to statutory restrictions on how that program is funded. Five percent of districts – primarily the state’s largest districts, such as Austin and Houston – have opted out of TRS-ActiveCare. Last session, legislation was considered to allow districts a one-time opportunity to opt in or opt out, but such a bill was not passed ultimately.

Teach the Vote’s Week in Review: Dec. 14, 2018

From school finance and retirement to school accountability ratings, here’s your weekly wrap-up of education news from the ATPE Governmental Relations department:


School finance commission meeting Dec. 11, 2018

The Texas Commission on Public School Finance met on Tuesday of this week to begin deliberating recommendations for the body’s final report due at the end of this month. Among the suggestions discussed Tuesday were (1) outcomes-based funding hinged upon early literacy and student preparedness for entrance into college, the military, or a career field without remediation; and (2) a high-quality teacher allotment that would require school districts to develop local, multi-measure assessments of their educators. Those assessments would need to comply with criteria outlined by the legislature.

While some members of the commission bristled this week at the idea of requesting more funding from the legislature, others, including House Public Education Committee Chairman Dan Huberty (R-Humble), stated that he would refuse to sign a report that did not request more funding. Sen. Paul Bettencourt (R-Houston), chair of the commission’s working group on revenues, suggested that the full commission adopt Gov. Abbott’s plan to cap property taxes at 2.5% annually. Meanwhile, Leo Lopez, Chief Finance Officer for the Texas Education Agency, pointed out during Tuesday’s hearing that the governor’s plan is more of a property tax relief plan than a school finance reform plan.

A more detailed breakdown of Tuesday’s meeting can be found in this week’s blog post from ATPE Lobbyist Mark Wiggins.

Other recommendations in the commission’s draft report, which can be previewed here, include prioritizing the state’s “60×30” goal, which is to have 60 percent of high school graduates eligible to enter the workforce with an industry certification, successfully join the military, or enter college without the need for remediation by the year 2030. More technical recommendations include reallocating $5.34 billion in existing revenues and revising the current weights and allotments in order to boost the basic allotment, which provides a baseline of funding for all 5.4 million school children in Texas. Throughout the commission’s year of deliberations, scores of education stakeholders and experts have shared their input, including invited testimony from ATPE back in February.

The commission will meet once more on Wednesday, Dec. 19, to vote on its final recommendations before submitting its report to the legislature as required on or before Dec. 31. Stay tuned to Teach the Vote for updates on the final vote.


The Teacher Retirement System of Texas (TRS) Board of Trustees met in Austin at the TRS headquarters on Thursday, Dec. 13, and Friday, Dec. 14, for its final meeting of 2018. Board committees met on Thursday. Each committee’s meeting materials can be found below. The full board met Friday morning to consider the following agenda. Video of the board committee meetings and the full board meeting is also available for viewing.

For additional information, view the following TRS board meeting materials:


Today the Teacher Retirement System of Texas (TRS) released an updated Pension Benefit Design Study. This recent study augments the body of knowledge generated by a 2012 study on the pension program for Texas educators. The updated study released today by TRS outlines benefits and statistics about the pension system, and includes such findings as these, which are in line with ATPE’s positions on TRS:

• A total of 96 percent of public school employees do not participate in Social Security. For many TRS members, the only source of lifetime income in retirement is their TRS benefit. A lifetime benefit helps mitigate the risk of a retiree who — due to longevity, market volatility or failure to invest adequately — outlives his or her savings.

• A majority of TRS members would end up more financially at-risk by investing on their own in a plan with a defined-contribution component.

• The TRS benefit, as currently designed, replaces roughly 69 percent of a career employee’s pre-retirement income when that person initially retires.

• Alternate plans would be 30 to 124 percent more expensive than the current defined benefit plan to provide the same benefit level upon an employee’s retirement.

More information about the study can be found in this TRS press release, along with a one-pager about the pension program. The full text of the new report can be accessed here.

Preserving the integrity and solvency of the TRS defined-benefit pension plan for educators is one of ATPE’s priorities for the 86th legislature.


The Texas Education Agency (TEA) has released its final academic accountability ratings for the 2018 year. The ratings include results for 1,200 school districts and charters and over 8,700 campuses within the state. While preliminary ratings were released in August, this final release includes the ratings of districts and charters that contested their initial ratings. More information about the accountability ratings can be found here. To search the ratings by district or campus, visit TXschools.org