Category Archives: TRS

TEA and TRS both lay out their budget requests to LBB

During a full day of marathon hearings on Wednesday, Texas Education Commissioner Mike Morath and Teacher Retirement System (TRS) Executive Director Brian Guthrie both laid out their agencies’ Legislative Appropriations Requests (LARs). The presentations were made to a panel of staffers representing the Governor’s and Lt Governor’s offices, as well as House and Senate budget writers.

ATPE previously issued a statement about the state’s continued shift in reliance on local property taxes, and away from non-property tax revenue, to fund public education represented in TEA’s LAR. The agency’s LAR predicts a reduction of $3 billion in state aid, or $1.5 billion per year, over the next biennium.

There is an available video archive of Morath’s presentation in addition to TEA’s full LAR document, which lays out much of the commissioner’s agenda for the next two years.

Guthrie laid out his agency’s substantial appropriations request later in the day, which included increased contributions of $1.6 billion for the biennium to cover the decrease in projected investment revenue attributable to TRS’s lowering the assumed rate of return on pension fund investments. The TRS budget request also includes approximately $400 million in additional funding to cover the projected shortfall for TRS-Care, the retired educators’ health insurance program. While funding for the active educator health insurance program flows through TEA, not TRS, Guthrie did bring up the fact that the cost of active educator healthcare was also of concern and would be appropriate to address in the upcoming legislative session. While the funding does not flow through the agency, TRS does administer TRS-ActiveCare, which many districts use to provide insurance to their employees.

A video archive of Guthrie’s presentation is available to watch, in addition to the documents that TRS provided to the Legislative Budget Board for this week’s hearing.

Teach the Vote’s Week in Review: Sept. 7, 2018

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


Testifying at the House Appropriations Subcommittee on Article III this week, ATPE Lobbyist Monty Exter advocated for an expansion of the list of free and near-free drugs covered by TRS-Care. The subcommittee, which met Wednesday, oversees the state’s education budget, including the Teacher Retirement System’s pension fund and health insurance. A persistent lack of funding over the years has lead to an increased burden on both active and retired educators who have seen healthcare premiums rise with no increase in the percentage contributed to their pensions. The urgent need for more funding and resources for the TRS system will be a hot button issue during next year’s 86th Legislative Session, one that ATPE lobbyists will be tackling head on. Find out more about Wednesday’s subcommittee hearing in this article by ATPE Lobbyist Mark Wiggins.

 


The 2018 general election is right around the corner, but even closer than that is a special election runoff in Texas Senate District 19 (SD 19). The special election was called when former Sen. Carlos Uresti stepped down following his felony conviction. While all Texans are not be able to participate in this one special election, all Texans will feel the effects of its outcome as San Antonio residents decide who will take one of the Texas Senate’s 31 seats.

Next Monday through Friday, Sept. 10-14, voters in the district that runs from the greater San Antonio metroplex to the tiny town of Orla, Texas, will have a say in whether Democrat Pete Gallego or Republican Pete Flores represents them in the state’s upper chamber when the legislature convenes in January. For those who miss early voting, the special election runoff for SD 19 will take place Tuesday, Sept. 18, 2018.

 


The Texas Education Agency (TEA) posted its Legislative Appropriations Request (LAR) this week ahead of formally presenting it to the Legislative Budget Board next Wednesday. LARs lay out all of an agency’s intended expenditures for the upcoming biennium and are, as a group, the basis for what will eventually become the state budget. TEA’s LAR includes not only agency-level spending but also all of the funding that flows through the Foundation School Program and out to school districts. As has been the case in the past, the TEA document includes a statement about reductions in the anticipated level of state spending based on the reliance on an assumed increase in local property tax collections. For the upcoming biennium, the agency is assuming the state will supplant $1.5 billion in state revenue by relying on these local dollars. ATPE released the following press statement in response.


The House Public Education Committee released its preliminary report on school safety this week. The report follows the release of similar interim documents by a Senate committee and Gov. Greg Abbott, but the House report is unique in its focus on directing state funding to accomplish a number of goals aimed at preventing future tragedies like the school shooting in Santa Fe, Texas.

The report is the result of several interim hearings held over the summer at the direction of Texas House Speaker Joe Straus and committee chairman  Rep. Dan Huberty (R-Kingwood). Read a summary of the report’s findings and take a look at the full report itself in this post by ATPE Lobbyist Mark Wiggins.


The Texas State Board of Education (SBOE) is scheduled to meet Tuesday through Friday of next week, and the agenda includes a formal look at its Long-Range Plan for Public Education.

The plan is the result of more than a year of meetings and stakeholder input, which includes in-person conferences and an online survey seeking guidance from educators and community members all over the state. The final product includes recommendations related to attracting and retaining educators and lifting up the education profession. Follow ATPE Lobbyist Mark Wiggins on Twitter (@MarkWigginsTX) for updates on the plan, which will be discussed on Tuesday.

 

Teach the Vote’s Week in Review: Aug. 24, 2018

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


Last week, Lt. Governor Dan Patrick sent a letter to the Teacher Retirement System of Texas (TRS) insisting that the body not raise insurance premiums on retired educators. ATPE Lobbyist Monty Exter breaks down why many feel the letter is nothing more than a political stunt in this blog post.


Donna Bahorich

Texas State Board of Education Chair Donna Bahorich will be participating in a listening session for the Federal Commission on School Safety on Tuesday, August 28, 2018, in Montgomery, Alabama. This listening session is the fourth in a series of panels that have been held across the nation with the goal of devising strategies to improve school safety. Tuesday’s afternoon event will be live-streamed. Find more information and read the press release in its entirety here.


U.S. Education Secretary Betsy DeVos is reported to be considering allowing the use of federal funds from Student Support and Academic Enrichment Grants to arm educators. The grants are intended to improve academic achievement; however, nothing expressly forbids the funds from being used to purchase firearms. In the wake of recent school shootings the Texas Education Agency (TEA) received a number of inquiries asking whether the funds could be used for such measures. Wile the agency never received an official response from the Department of Education, the proposal may very well become legitimized. You can learn more in this article from the Texas Tribune.


This week the Texas Education Agency (TEA) announced a proposed rule change filed by Commissioner Mike Morath regarding students who’ve taken high school end-of-course (EOC) assessments in middle school. Students in grades 3 through 8 who are enrolled in a course that awards high school credit may currently take STAAR EOC assessments prior to entering high school. This includes Algebra I, English I, and English II. However, the federal Every Student Succeeds Act (ESSA) requires all students to take a math and reading or language arts test in high school.

In order to satisfy this federal requirement, the new rule will require schools to use the SAT or ACT to assess high school students who completed their math or English EOC assessments before their freshman year. This change is expected to cost districts about $50 for each student tested in this way, which number an estimated 109,000 statewide. The total statewide impact is therefore estimated at $5.45 million. The new rule appears in today’s Texas Register and you can read it in its entirety here.

 


 

Return to sender: Letters to TRS are political farce

Earlier this month, Lt. Gov. Dan Patrick released a letter sent to the Teacher Retirement System of Texas (TRS) urging the board not to increase TRS-Care premiums for retired educators. Quickly following Patrick’s lead, state Sen. Joan Huffman (R–Houston) released a letter of her own also urging TRS to not increase premiums. Huffman chairs the Senate committee charged with overseeing TRS.

With no TRS board meeting until late September and TRS releasing no additional information regarding potential premium increases, these letters came as a bit of a surprise to both education advocates and to TRS. They were also particularly shocking considering the fact that neither the lieutenant governor nor the Senate over which he presides are known for generosity in spending state dollars on education or educators.

Perhaps, however, when put into the context of an election season in which both retired and active educators are still miffed at the way TRS-Care reform was handled last session, the letters, which otherwise seem out of character, make more sense. For example, Lt. Gov. Patrick’s letter was addressed to the chairperson of the TRS board, but was simultaneously delivered to the press. Chairman Jarvis Hollingsworth and the rest of the TRS board are gubernatorial appointees, not an elected body. They serve at the pleasure of Gov. Greg Abbott. TRS, a state agency, operates under the direction and oversight of the legislature. Working directly with TRS, perhaps in coordination with the governor’s office, especially on an issue that isn’t yet public, would have been every bit as effective as making a public announcement of this type. Additionally, aside from the direct request not to raise premiums, the rest of Patrick’s letter sounds more like a campaign stump speech aimed at voters — claiming accomplishments and making future promises — than it does a typical letter expressing direction to a state agency.

Let’s look at some of those “accomplishments” and promises.

Patrick states, “In the last 4 years the Texas Senate has taken the lead in adding over a billion dollars to TRS Care funding including over $200 million in the Special Session last year.”

First, let’s address the funding from the special session. The special session occurred less than three months after the regular session ended, and the state’s economic picture was virtually unchanged. So what did change that allowed Patrick and the Senate to “find” $200 million dollars that they were unwilling to spend less than three months prior? The passage of the TRS-Care reform bill was one of the last things to happen during the regular session. As soon as the bill passed, news of the dramatic increases in retiree premiums hit like a ton of bricks. Hundreds — if not thousands — of retired educators began to call their elected officials, understandably irate. With a special session on things like the failed bathroom bill already on the horizon, additional money to somewhat lessen the blow to angry retirees was added to the call in an attempt to head off an all-out revolt.

Next, let’s put into perspective the amount spent over the last four years and address the way it was spent. A billion dollars sounds like a lot of money; but over four years it represents only about one quarter of 1% of the Texas budget. Additionally, all but $165 million of that billion was put into the budget as one-time supplemental funding. That is significant because the Senate all but refused to add money to the budget as an increase to the funding formulas instead, which is built into the base budget on an ongoing basis and significantly reduces the need to fight for that funding in future sessions. Not only did the Senate resist increasing the formulas beyond the $165 million, it’s in fact unlikely that any of the money would have been put into the funding formula had the House, under the leadership of Speaker Joe Straus (R-San Antonio), not fought for the formula increase.

If the dollars put into TRS in the 2015 session had been budgeted as formula instead of supplemental funding, the shortfall during the 2017 session would have only been about $300 million, instead of a billion. It would have been much easier for advocates to rally legislators to find $300 million dollars as opposed to a billion, and retirees could have likely avoided dramatic premium increases. Finally, had Patrick and the Senate put the money spent in 2015 and 2017 into the formulas, there would likely be little to no shortfall going into 2019.

Unfortunately, since the money spent over the last two sessions was not delivered through increased funding formulas, we do have a significant shortfall in TRS-Care funding going into 2019. However, the lieutenant governor goes on to state that he is “confident that the Senate will support additional funding for TRS Care” and that he “believe[s] additional funding should be the responsibility of the Legislature and not fall on the shoulders of our retired teachers.” Considering how hard advocates and retirees had to fight for funding last session, it’s good — though surprising — to hear that the lieutenant governor is confident that full state funding will be available this session. Hopefully that’s not the type of campaign promise that seems to evaporate as soon as the election is over.

Without a doubt, ATPE and thousands of retired educators would prefer TRS-Care premiums either decrease or remain steady, as opposed to increase. Whether or not that preference becomes reality will be entirely up to the next legislature. Let’s hope that retired and active educators remember how much impact elected officials have on them and their students when they cast a ballot in November and that elected officials remember how impactful active and retired educators are during the next session, after those ballots have been cast.

Teach the Vote’s Week in Review: July 27, 2018

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


The Board of Directors for the Teacher Retirement System (TRS) met this week to discuss the pension fund’s assumed rate of return. Today the board voted to reduce the rate of return from 8% to 7.25%, anticipating a decline in investment revenue. It is now up to the legislature to provide additional funding for TRS in order to prevent a shortfall and stretch the already dwindling resources of educators even further. ATPE Lobbyist Monty Exter testified at the TRS board meeting and explains more about the decision in this post, which also includes a fact sheet provided by TRS staff.


 This week the Senate Select Committee on Violence in Schools and School Security met to discuss the last of the four charges assigned to them by the Lt. Governor. The panel heard invited and public testimony regarding best practices for preventing violence in schools and other topics. Not much longer after the hearing, Lt. Gov. Dan Patrick released a statement in which he said he would not support “red flag” laws, laws aimed at seizing the guns of those deemed a danger to themselves or others, citing failed legislation from last session as well as Gov. Abbott’s recent reticence to support red flag laws. The committee will now deliberate and release a report during the first week of August. More details about the hearing can be found in this post by ATPE Lobbyist Kate Kuhlmann.


Lt. Gov. Dan Patrick currently has no plans to debate his Democratic opponent, Mike Collier, despite repeated calls from the Collier campaign and many voters interested in the race for lieutenant governor. In a statement to the Texas Tribune, Allen Blakemore, a strategist for the Patrick campaign said the following:

“It’s no secret Lt. Governor Patrick relishes debates, but since his opponent shows no sign of grasping even the most basic rudiments of state government, our campaign has no plans to debate him,”

In response to this statement, the grassroots educators group Texans for Public Education offered to facilitate the debate by offering assistance “with location,  moderation, with time and date…” and other details. The full statement from the group can be read here.

Read more in this story from the Texas Tribune.


Earlier this week, both the U.S. House and Senate approved legislation aimed at revising the federal law that governs career and technical education (CTE). The Senate first passed a bill reauthorizing the Perkins Career and Technical Education Act. The House concurred with the Senate’s changes and the bill was sent to the President. At this time, President Trump has not yet signed the bill, but it is likely that he will. ATPE Lobbyist Kate Kuhlmann provides more information here.


TRS update: The vote is in

After taking testimony from many active and retired educators and those who advocate for them, including ATPE, the TRS board of directors deliberated today and ultimately adopted an assumed rate of return of 7.25%, down from 8% currently.

You can read more about this issue in previous Teach the Vote blog posts, including this post from yesterday. ATPE has also released this press statement following this morning’s vote.

TRS has provided this infographic to help interested parties better understand the reasons behind the move to a new rate and address some questions related to change.

One thing is certain: the ball is now firmly in the legislatur’es court to properly fund the TRS pension through increased compensation rates. Educators who are interested in the health of the fund should keep that in mind at the ballot box in November.

What’s happening at TRS this week?


This week, the TRS board of directors will discuss and likely take action on a recommendation to lower the assumed rate of return (RoR), based on investment forecasts provided by independent financial experts hired to assess all of the assumptions TRS staff uses for planning purposes. Should the board lower the assumed RoR it would be in line with broader trends in the public pension sector, including TRS’s peers. The vast majority of experts expect less robust investment returns in the near and mid-term future.

In order to maintain the long term health of the fund without decreasing pension benefits, contribution rates will need to be increased to offset an anticipated decrease in investment revenue. Unlike many local pension systems (e.g., municipal, police, and fire), the TRS board does not set contribution rates for either employees or employers; nor does the board set the benefits paid out to retirees. Both TRS contributions and benefits are completely determined by the Texas legislature. Should the legislature fail to pass a plan to provide adequate contributions over time, the only remaining options would be to reduce benefits, further weakening current and future retirees’ retirement security, or put the fund into a situation where benefits being paid out exceed revenues coming in, which would place the fund on a path to eventual insolvency.

The bottom line is that the burden is on the Texas legislature to step up and provide the necessary funding to ensure actuarial soundness of the TRS pension fund and give educators peace of mind that they will not face cuts in their pensions or other dramatic pension plan changes. Historically, the legislature has not been proactive in this area and has not prioritized funding for retired educators’ needs, opting to delay action until the pension fund reaches a crisis level.

Some educator groups have urged their members to flood TRS board members with calls and emails this week. We believe their calls to action, while well-intentioned, are misdirected, as the TRS board has virtually no authority over contributions or benefits and, with regard to investments, has a fiduciary duty to act in what it believes to be the best interest of the fund based on the prudent advice of its financial experts. In other words, TRS has few options at this time, given the legislature’s disregard over the course of decades for the growing financial needs of the pension fund.

The only way to avoid a major TRS funding shortfall that will hurt the educators who depend on the fund is legislative action, not action from TRS. With that in mind, educators who care about the short- and long-term health of TRS should be focused on the legislature, not the TRS board members. Current legislators who have not prioritized TRS funding have caused the current problem. Is it reasonable to expect those same legislators to now fix it, or does it make more since go to the polls in November and elect legislators who will prioritize TRS funding as part of a general dedication toward public education?

Check back tomorrow for a follow-up report on what action the board takes on the assumed RoR.

Teach the Vote’s Week in Review: June 22, 2018

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


A full meeting of the Texas Pension Review Board (PRB) was held on Monday, and the body voted to adopt voluntary guidelines designed to work as best practices for how retirement plans are funded. While the Teacher Retirement System (TRS) meets many of the PRB’s voluntary standards, it fails to meet standards in two critical areas that can be crippling to TRS members. Read more about the guidelines in this post by ATPE Lobbyist Monty Exter.

 


Earlier this month the State Board of Education voted unanimously to adopt curriculum standards for  a high school elective course entitled “Ethnic Studies: Mexican American Studies”. This comes after months of back and forth between members of the board and stakeholders over content and curriculum standards for the course as well as what it should be named. In this commentary, SBOE Chair Donna Bahorich (R-Houston) reflects on how working together made this course a reality and how that gives her hope, both for the state of Texas and the nation.

 


School may be out, but the fight for Texas public schools is ongoing. ATPE Lobbyist Mark Wiggins breaks down the ways you can engage with the legislature and advocate for your profession during the summer in this blog post.

Texas Pension Review Board adopts principles of retirement plan design

A subcommittee of the Texas Pension Review Board (PRB) has been working over the last several months on a set of non-binding guidelines meant to impart what the board feels are best practices with respect to retirement plan design for use by the retirement plans that are required to report to the board.

Despite some concern expressed by smaller funds over how the board’s non-mandatory recommendation on vesting periods might be made into a legal mandate by the Texas Legislature, the full PRB unanimously adopted the proposed principles, which can be found here, at its most recent meeting.

The Texas Teachers Retirement System (TRS) pension fund is one of the many funds, and certainly the largest fund, required to report to the PRB. While the design of the TRS pension fund by and large already meets the voluntary standards enumerated in the PRB’s principles document, the two areas where it does not are notable. First, the principles document calls for “contributions to retirement plans [to] be consistent with the PRB Pension Funding Guidelines.” Those guidelines call for plans to be funded at a level that would allow the plans’ unfunded liability to be amortized over less than 30 years. Second, the PRB principles say that a plan’s “retirement benefits should be protected against the erosion of the benefit’s value due to inflation.” Essentially that means plans should include built in COLAs (Cost of Living Adjustments). In both instances, that the TRS pension plan does not comply with these best practices is a function of the Legislature choosing not to fund the plan adequately.

Perhaps the Legislature and the Governor should take a note from the PRB, a body the legislature created whose chairman the Governor appoints, and fund TRS adequately to comply with the PRB’s newly adopted principles.

 

 

Teach the Vote’s Week in Review: May 11, 2018

From Austin to the nation’s capital, here’s a look at how ATPE’s lobby team has been working hard for you this week:


Early voting starts Monday for Texas’s Republican and Democratic primary runoffs on May 22. This week ATPE continued to highlight races across the state where education has pushed to the forefront of political discourse heading into the runoffs. We encourage you to learn more about the races in your district by visiting the candidates section of TeachtheVote.org and by checking out our runoff spotlights for candidates in House Districts 4, 8, 54, 62, and 121.

Remember, if you voted in a party primary back in March, you may only vote in the same party’s runoff election this month. If you are registered but did not vote at all in March, you may choose to vote in either party’s runoff election. You can find more information on eligibility to participate in the runoffs and what you need to do here.

Early voting for the runoffs is May 14-18, 2018, and runoff election day is May 22,2018.

 


ATPE’s lobby team has been working to prevent a controversial private school voucher amendment from being added to a national defense bill that is on the move. The U.S. House Committee on Armed Services met this week to consider the National Defense Authorization Act. Our Austin- and Washington-based lobbyists have watched the development of this bill closely since learning that discussions of adding a voucher were underway in the House. As ATPE Lobbyist Kate Kuhlmann reports today, the potential voucher, in the form of an Education Savings Account (ESA), would funnel existing federal Impact Aid dollars to military families without accountability for how those funds are spent. While the ESA didn’t make it into the bill during committee, it now heads to the floor of the House for debate. There, it could still be added through the amendment process.

ATPE sent a letter this week to Chairman Pete Sessions (R-TX), who leads the committee that determines which amendments will be considered on the House floor, asking him not to allow the voucher amendment. The letter highlights that we join the Military Coalition, a group of 25 organizations representing more than 5.5 million active and former members of the U.S. Military, in opposing the voucher. “The $2,500 voucher program created by HR 5199,” ATPE Governmental Relations Director Jennifer Mitchell Canaday wrote, “would drain limited dollars from both the public school system in Texas as well the Federal Impact Aid Program, hurting the very military-connected students it purports to help.” Read the full letter here and check back for developments on this issue.

 


An article by the Texas Tribune this week explored how charter schools operate in a precarious gray space that makes them a government entity at some times and a private entity at others. ATPE Lobbyist Monty Exter is quoted in the full-length article by Emma Platoff, which is republished here on Teach the Vote.

 


In an effort to encourage parents, teachers, and school leaders to actively participate in the rulemaking process, TEA sent a letter to school administrators on Wednesday requesting that school districts and open-enrollment charter schools post upcoming rulemaking actions on their websites. Learn more about the request and ATPE’s involvement in rulemaking changes in this blog post by ATPE Lobbyist Mark Wiggins.

 


 

House Pensions Committee meeting May 10, 2018, in Dallas.

The Teacher Retirement System (TRS) of Texas was one of the many items discussed at Thursday’s meeting of the House Committee on Pensions held in Dallas, TX. The meeting, which focused on the committee’s interim charges, featured testimony from TRS Executive Director Brian Guthrie plus a number of active and retired educators. ATPE Lobbyist Mark Wiggins attended the hearing and provided full details in his blog post here.