Tag Archives: senate

Senate school safety panel issues recommendations

The Senate Select Committee on Violence in Schools and School Security released its interim report today. The charges were issued by Lieutenant Governor Dan Patrick following the school shooting at Santa Fe High School. The four charges involved studying (1) school infrastructure and design to address school security; (2) programs within schools aimed at school safety; (3) the root causes of school mass murders; and (4) the effectiveness of protective order laws in Texas and other states.

Interim charge number three, which focused on mental health issues in schools, received a considerable amount of attention in the report. School counselors and other mental health resources are emphasized under the correlating recommendations. The fewest number of recommendations surfaced from studying protective order laws, which involve temporarily restricting firearm access to certain individuals who pose extreme risk. No recommendation was made to enact a version of protective order laws known as a “red flag” law, which Governor Abbott proposed but Patrick strongly rejected. Regarding firearms, there is a recommendation to consider funding for supporting school marshal programs.

The full recommendations from each charge are listed below. The full report cab viewed here.

School infrastructure and design recommendations

  • Consider legislation to allow additional funds for school districts to implement enhanced physical security including metal detectors, alarm systems, cameras, and hardened entrances.
  • Consider updates to school building codes to ensure best practices are used in designing new school facilities.
  • Consider legislation to clarify that school districts must identify a campus administrator who is responsible for identifying and maintaining contact with local law enforcement, local emergency agencies, and fire departments in their security audits.
  • Consider legislation giving TEA oversight to ensure required school security audits are being completed and ensure TEA has the staff necessary to oversee compliance.
  • Direct the State Fire Marshal’s Office to review and provide guidance on procedures and sequences concerning school evacuations for unverified emergencies and the required number of fire drills mandated for schools.

School safety programs recommendations

  • Consider the appropriate level of funding for and involvement of fusion centers.
  • Review Penal Code Chapter 46.03 and provisions by which school districts authorize individuals to carry concealed weapons onto campus and consider establishing a minimum standard for training hours.
  • Consider legislation to allow additional funds for training for school marshals and individuals licensed to carry under Chapter 46.03 of the Penal Code.

Root causes of school violence recommendations

  • Consider legislation to direct TEA to incorporate school counselor data into PEIMS regarding location and number of students served.
  • Review the effectiveness and unintended consequences of “zero tolerance” polices in Texas schools.
  • Consider methods to increase the availability of school counselors, Licensed Specialists in School Psychology, and school social workers in schools, particularly in rural and remote areas of the state.
  • Consider legislation codifying the duties and responsibilities of school counselors, Licensed Specialists in School Psychology, and school social workers.
  • Consider legislation incorporating threat assessment teams into Health Advisory or School Safety Committees already on campus.
  • Expand the availability of Mental Health First Aid training for all school district employees interacting with students.
  • Review the use of Disciplinary Alternative Placement Education Programs (DAEP) and consider behavior intervention methods.
  • Consider expanding the use of telemedicine and telepsychiatry to help children in crisis obtain access to mental health services before violence occurs.
  • Consider legislation to strengthen the state’s mental health system by leveraging the expertise of state medical schools by creating psychiatry hubs that connect pediatricians seeking consultation with experts in mental health.

Protective order laws recommendations

  • Consider legislation to clarify current statute on whether and when an individual convicted of domestic violence may possess a firearm legally.
  • Consider legislation to clarify current statute regarding the return of firearms to individuals who have been detained and declared to no longer be a risk to themselves or others.

From The Texas Tribune: Republican Pete Flores, Democrat Pete Gallego set for runoff for Uresti seat

By Patrick Svitek, The Texas Tribune
July 31, 2018

Former U.S. Rep. Pete Gallegos (left), a Democrat, and Republican Peter Flores are running for state Senate District 19. Photo by Bob Daemmrich: Gallego/Campaign website

Republican Pete Flores, Democrat Pete Gallego set for runoff for Uresti seat” was first published by The Texas Tribune, a nonprofit, nonpartisan media organization that informs Texans — and engages with them — about public policy, politics, government and statewide issues.

Republican Pete Flores and Democrat Pete Gallego are headed to a runoff in the special election to replace convicted former state Sen. Carlos Uresti, D-San Antonio.

With all precincts reporting Tuesday night, Flores led Gallego by 5 percentage points, 34 percent to 29 percent, according to unofficial returns. At 24 percent, state Rep. Roland Gutierrez of San Antonio came in third in the eight-way race, and he conceded in a statement. The five other candidates were in single digits, including Uresti’s brother, outgoing state Rep. Tomas Uresti of San Antonio.

The first-place finish by Flores, who unsuccessfully challenged Carlos Uresti in 2016, is a boon to Republicans in the Democratic-leaning district. In the home stretch of the race, Flores benefited from a raft of endorsements from Texas’ top elected officials including Gov. Greg Abbott, Lt. Gov. Dan Patrick, and U.S. Sens. John Cornyn and Ted Cruz.

Their heft will continue to be tested in a district considered friendly to Democrats, if not solidly in their column. After taking congratulatory calls from Abbott and Patrick, Flores issued a statement insisting a second-round victory was within reach.

“I know we can win this runoff,” Flores said. “We will win this runoff. The real work begins tomorrow.”

Rallying supporters in San Antonio, Gallego promised his campaign would not get outworked in the yet-to-be-scheduled overtime round. “I know, in the final analysis, we win,” he said.

The special election was triggered in June, when Carlos Uresti resigned after being found guilty of 11 felonies, including securities fraud and money laundering, tied to his work with a now-defunct oilfield services company. He was sentenced to 12 years in prison days after he stepped down.

Much of the action in the race centered on Gutierrez and Gallego, a former congressman and longtime state House member from West Texas. Gutierrez went after Gallego over questions about whether he lives in the district, among other things, while Gallego highlighted Gutierrez’s history of tax problems.

Flores, a former Texas game warden, was the best-known of three Republicans on the ballot Tuesday. He received 40 percent of the vote against Carlos Uresti two years ago in SD-19, which encompasses a 17-county area that starts on San Antonio’s East Side and sprawls hundreds of miles west.

This article originally appeared in The Texas Tribune at https://www.texastribune.org/2018/07/31/sd-19-special-election-results/.

 

Texas Tribune mission statement

The Texas Tribune is a nonprofit, nonpartisan media organization that informs Texans — and engages with them — about public policy, politics, government and statewide issues.

Senate school safety panel discusses gun protective order laws

The Senate Select Committee on Violence in Schools and School Security met today to cover its final charge covering protective order laws, which involve temporarily restricting firearm access to certain individuals who pose extreme risk. The full charge reads:

Examine whether current protective order laws are sufficient or whether the merits of Extreme Risk Protective Orders, or “Red Flag” laws, should be considered for seeking a temporary removal of firearms from a person who poses an immediate danger to themselves or others, only after legal due process is provided with a burden of proof sufficient to protect Second Amendment rights guaranteed by the United States Constitution.

The committee first heard invited testimony from state officials, who explained current state and federal protective order laws as well as similar laws in other states. The invited testifiers also included representatives from the following stakeholder groups: The Texas District and County Attorneys Association, Moms Demand Action for Gun Sense in America, the Texas State Rifle Association, Texas Gun Sense, and an attorney who works on second amendment rights.

The issue brought forth invited and public testifiers on both sides of the issue. Some testifiers provided input on the value of protective order laws in other states, the need for revisions to current state laws, suggestions on what parameters should be used to identify those who could be subject to temporary gun removal, and other best practices for utilizing the laws to prevent gun violence in schools. However, others argued that alternative laws in other states are overly restrictive, that protective order laws fail to guarantee due process, and that Texas laws already in place can serve to intervene in order to prevent future potential gun violence by those who may pose a risk.

Now that the committee has concluded its work taking testimony on the four charges assigned by Lt. Gov. Dan Patrick, they are tasked with writing a report on their findings. Those findings are due to the Lt. Gov. by the first week of August. Stay tuned for more from Teach the Vote as the committee releases its report and the legislature prepares to address school safety in the upcoming 2019 session.

Teach the Vote’s Week in Review: July 20, 2018

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


Shannon Holmes

This week included some big news for our central office. ATPE announced Hardin-Jefferson ISD Superintendent Dr. Shannon Holmes will take over the reins as our new ATPE executive director starting in September. Dr. Holmes was recommended by a search committee composed of ATPE stakeholders and was approved by a vote of the ATPE Board of Directors.

Dr. Holmes has led HJISD, a 4A school district based in Sour Lake in Southeast Texas, since 2005. He brings 20 years of experience with Texas public schools, a long history of involvement with public education organizations, a strong background in business and finance, and proven engagement with issues facing public education in Texas. He currently serves as chair of the 2018 Legislative Council for the University Interscholastic League (UIL) and has experience testifying before committees of the Texas Legislature.

We’re excited to welcome Dr. Holmes to the ATPE family! Please join us in making him feel at home. You can read more about Dr. Holmes in the official ATPE press release.


The Senate Select Committee on Violence in Schools and School Security met again Wednesday of this week at the Texas Capitol. This marked the third meeting of the committee formed by Lt. Gov. Dan Patrick in the wake of the horrific shooting in Santa Fe, Texas. The Texas House of Representatives has held similar hearings through its Public Education and Public Health committees. The agenda for Wednesday’s meeting was laid out as follows:

Examine the root cause of mass murder in schools including, but not limited to, risk factors such as mental health, substance use disorders, anger management, social isolation, the impact of high intensity media coverage — the so-called “glorification” of school shooters — to determine the effect on copy cat shootings, and the desensitization to violence resulting from video games, music, film, and social media. Recommend strategies to early identify and intercept high-risk students, as well as strategies to promote healthy school culture, including character education and community support initiatives.

Lawmakers heard plenty of calls for additional resources, such as counselors and psychologists, to address these issues. However the Senate in particular has a history of being resistant to initiatives that involve increasing state spending on schools. You can read a recap of the hearing by ATPE Lobbyist Kate Kuhlmann here.


A busy and successful ATPE Summit last week in Dallas didn’t slow down ATPE’s state officers, who were back to work Monday morning advocating for ways to keep campuses safe.

ATPE State President Carl Garner, State Vice President Byron Hildebrand, State Secretary Tonja Gray, and State Treasurer Jimmy Lee were invited by the governor’s staff to participate in stakeholder meetings covering a range of topics pertaining to school safety.

This included feedback relating to law enforcement in schools, the marshal program, and students removed from traditional classrooms for disciplinary reasons. ATPE leaders were able to share their personal experiences with Gov. Greg Abbott’s staff and make suggestions for ways to maximize campus safety. Read more about their meeting in this post by ATPE Lobbyist Kate Kuhlmann.

Senate school safety committee looks at mental health

The Select Committee on Violence in Schools and School Security met yesterday at the Capitol. The committee has previously discussed resources and programs to help schools prevent school violence and school infrastructure and design to address school security. This time, the committee turned its attention to mental health, and expert after expert shared that more resources are needed. The complete committee charge:

Examine the root cause of mass murder in schools including, but not limited to, risk factors such as mental health, substance use disorders, anger management, social isolation, the impact of high intensity media coverage — the so-called “glorification” of school shooters — to determine the effect on copy cat shootings, and the desensitization to violence resulting from video games, music, film, and social media. Recommend strategies to early identify and intercept high-risk students, as well as strategies to promote healthy school culture, including character education and community support initiatives.

It is no surprise that the need for resources was a regular theme in yesterday’s hearing. A 2013 report from the Centers for Disease Control and Prevention estimated that up to 1 in 5 children in the United States experience a mental disorder in a given year. That means up to 20% of the children in our Texas classroom and schools are faced with a mental issue of some kind. Those can interfere with a students ability to learn, result in classroom disruptions, or even become a threat to school security. Testifiers relayed resources in various forms to address these issues.

Suggested resources included more counselors, psychologists, programs, and training, all of which cost money – money that many on the committee didn’t sound keen on spending. In a previous hearing, a retired principal spoke about the effect large class sizes have on a teachers ability to know her students individually. Addressing this challenge is another issue that would require funding. Read more about the hearing and the issue of funding in this piece from the Texas Tribune.

The committee has one remaining charge to study prior to issuing a report to Lieutenant Governor Dan Patrick on its findings. The final charge asks the committee to consider whether Texas’s current protective order laws are sufficient or more should be done to aid the temporary removal of firearms from those posing an immediate danger. A hearing to discuss this charge is scheduled for Tuesday, July 24.

Teach the Vote’s Week in Review: June 15, 2018

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


ATPE leaders and staff meet with Rep. Kevin Brady.

A delegation of ATPE leaders and staff were in Washington, D.C. this week for several days of meetings covering multiple topics pertaining to public education policy at the federal level. Primarily, the contingent met with members of the Texas delegation in Congress as well as other key decision makers about the Windfall Elimination Provision (WEP), which negatively impacts the Social Security benefits of too many educators in Texas and across the country. Among their agenda was a meeting with U.S. House Ways and Means Chairman Kevin Brady (R-TX), who has led a push to replace the current WEP with a fairer formula for calculating the Social Security benefits of those affected. The team of ATPE advocates also discussed our recent efforts to prevent federal vouchers and pressed for maintaining Title II funding within the Higher Education Act that supports educators, among other issues. Learn more about the work ATPE did in Washington this week in this post from ATPE Governmental Relations Director Jennifer Mitchell Canaday.

 


The Senate Select Committee on Violence in Schools and School Security met Monday and Tuesday for its inaugural meetings. The committee was established late last month by Lt. Gov. Dan Patrick following Gov. Greg Abbott’s roll out of a 40-page plan to address school safety following the school shooting tragedy in Santa Fe. So far the Lt. Gov. has assigned the committee four charges to study between now and the end of August, when he expects the committee to wrap up its work and offer recommendations on next steps. Two of the four charges were discussed this week. ATPE Lobbyist Mark Wiggins has a recap of the the Monday meeting covering school infrastructure and design techniques aimed at improving school safety. ATPE Lobbyist Kate Kuhlmann was at Tuesday’s hearing, and she has more on that day’s discussion covering school security programs. ATPE provided written testimony to the committee encouraging members of the committee to respect that the needs of local school districts differ broadly, understand that adequate funding must accompany proposals to address school safety, and engage educators as conversations on school safety continue. The committee is expected to meet again in July to focus on mental health.

 


The Texas State Board of Education (SBOE) met this week in Austin. Leading the headlines from the four-day meeting was coverage of developments regarding a long fought battle to establish a course focused on Mexican-American studies. That began on Tuesday when a meeting allowing public comment on a number of curriculum issues was largely focused on public comments regarding the newly approved course. A set of Texas Essential Knowledge and Skills (TEKS) were adopted for the course, and it was ultimately renamed based on input from public testifiers. Originally titled “Ethnic Studies: An Overview of Mexicans of American Descent” the course was changed by the board to “Ethnic Studies: Mexican American Studies.” The board also heard updates from TEA Commissioner Mike Morath regarding Hurricane Harvey, the Santa Fe school shooting, and assessment woes; voted to approve new charter applicants; and amended the dyslexia handbook. Linked in the text above are a series of posts from ATPE Lobbyist Mark Wiggins who attended the meetings and reported extensively on their work this week. Today’s final meeting gave the board the opportunity to finalize all of its work earlier in the week.

 


 

Senate committee talks school security programs

The Senate Select Committee on Violence in Schools and School Security met for the second day in a row Tuesday. While Monday’s hearing was dedicated to discussing school infrastructure and design that can help address school safety, Tuesday’s hearing centered around school security programs and resources. Invited testimony was primarily represented by law enforcement officers who discussed the following charge:

“Study school security options and resources, including, but not limited to, the school marshal program, school police officers, armed school personnel, the Texas School Safety Center, and other training programs to determine what improvements can be made to provide school districts and charter schools with more robust security options.”

In addition to representatives from various levels of law enforcement, invited testifiers included the director of the Texas School Safety Center, a superintendent, and a principal. All were there to highlight existing programs in Texas and offer other options. A considerable amount of time was spent on the School Marshal Program, which allows Texas school districts to appoint School Marshals on campuses who are authorized to carry firearms. On the School Marshal Program and other programs discussed, panelists emphasized strong training for participants.

One of the invited panelists, a retired principal from Friendswood ISD, also made a strong case for reducing class sizes in schools to address school safety. She highlighted what she has heard from educators in schools and what she knows from her own experience in the field: relationships are a key element of school safety and teachers cannot have meaningful one-on-one relationships with their students when there are 35 or more students in a classroom. She argued that reducing class sizes could improve the opportunity for teachers to really know and understand their students.

ATPE provided written testimony to the committee that highlighted relevant positions in our member-written-and-approved ATPE Legislative Program and pressed committee members to keep several things in mind as they continue these important discussions: (1) respect that the wishes of local school districts and their communities differ broadly based on local needs, (2) understand that adequate funding must accompany any proposals to address school safety, and (3) engage educators in the discussions as they continue.

Public testifiers included a number of Texas students and a big contingent of activists from the group Moms Demand Action, who were largely there to oppose the discussion around arming educators. The committee is not scheduled to meet again at this time, but future hearings are expected. Chairman Larry Taylor (R-Friendswood) said that the committee will host a meeting dedicated to mental health in July.

Teach the Vote’s Week in Review: April 6, 2018

Here’s a wrap-up of your education news from ATPE:


The Texas Education Agency (TEA) made several announcements this week regarding the draft plan to address special education in Texas. In addition to accepting public comments on the latest version of the draft plan, TEA has scheduled two hearings where members of the public are invited to express their input. Information on the two meetings is as follows:

  • Thursday, April 12, at ESC Region 1 – 1900 West Schunior, Edinburg, Tx.
  • Monday, April 16, at ESC Region 10 – 400 East Spring Valley Road, Richardson, TX.

Both meetings will begin at 1 pm, and those wishing to share feedback are asked to register onsite beginning at 12:30 pm (registration will end when the meeting begins). Registered participants will be called in the order they are registered and will be limited to three minutes. The hearing will end when all have testified or at 3 pm, whichever comes first. Those unable to attend either hearing can submit their written comments by email at TexasSPED@TEA.texas.gov by April 18 at noon.

To learn more about the two public hearings and the chance to submit written testimony, view TEA’s full press release, visit TEA’s special education webpage, and read ATPE Lobbyist Mark Wiggins’s post from earlier this week.

 


Texas Commissioner of Education Mike Morath sent a letter to school administrators today regarding three recent changes to how the spring 2018 State of Texas Assessments of Academic Readiness (STAAR) exams will be administered. The three changes involve offering medical exemptions for qualifying students, allowing for the transcribing of student responses that are recorded in the test booklet onto a blank answer document, and relaxing the rules around classroom displays. His letter indicates these moves are being made in response to district feedback and in an effort to “do all I can to help make this a positive experience and reduce stress for students and school district and charter school personnel.” Read Commissioner Morath’s full letter to learn more.

 


It was a busy Wednesday at the Capitol this week, and your ATPE Governmental Relations team was there to cover all the action. ATPE Lobbyist Monty Exter covered the Senate State Affairs Committee meeting, where pension and healthcare issues were the topic of discussion. That meeting included conversations about the factors affecting the Teacher Retirement System (TRS) of Texas pension fund and the TRS-Care retiree health insurance program. For more information on how the hearing unfolded, read Exter’s recap of the meeting or watch an archived webcast. You can find ATPE’s testimony, and other public testimony, at the end of the recording.

 


The Texas Commission on Public School Finance met this week in Austin for a discussion on property taxes and their role in the school finance system. A smaller working group of commission members met Wednesday to discuss outcomes. The highlight of Wednesday’s meeting was former Assistant U.S. Secretary of Education Tom Luce, who suggested it’s time to do “more with more, not more with less” when it comes to funding public schools in Texas. This was particularly compelling advice from Luce, considering he was a key player in the state’s last major school finance reform – all the way back in 1984.

All 13 members of the commission met Thursday to hear several panels discuss property taxes. While there was general agreement on the burden imposed by property taxes, the debate between some members over how to calculate the state’s share of public education spending continued anew. Importantly, state Rep. Diego Bernal (D-San Antonio) requested the state prepare a list of school revenue sources that have been cut over the last 10 years. You can read a full recap of Wednesday’s working group meeting by ATPE Lobbyist Mark Wiggins here, and a rundown of Thursday’s full commission meeting here.

 


The Senate Education Committee rounded out a busy Wednesday in Austin with a hearing to discuss interim charges related to virtual schools, “high quality education opportunities,” and the federal E-rate program. ATPE offered written testimony to the committee concerning the virtual education charge, cautioning against moves to further expand the Texas Virtual School Network without carefully considering the status of virtual schools’ performance. Recent research highlights concerns regarding these schools nationwide and a look at Texas accountability measures fail to paint a drastically different picture in Texas. ATPE Lobbyist Kate Kuhlmann was at the hearing and offers more on the discussion here.

 


 

Senate State Affairs Committee discusses future of TRS pension fund

The Senate State Affairs Committee met in Austin this week to discuss interim charges about the health of various state and municipal pension systems, including the Teacher Retirement System (TRS) of Texas. The committee heard invited testimony from the staff and members of the Texas Pension Review Board (PRB), as well as the heads of several pension systems, including TRS Executive Director Brian Guthrie.

Some of the more general discussion included senators, including Sen. Charles Schwertner in particular, making the case that defined benefit pension systems are somehow inherently flawed and should be scrapped and replaced with 401(k)-style defined contribution systems. This now tired pitch, whose real aim is to line the pockets of private money managers, has been soundly refuted on many fronts, particularly as it applies to TRS. First 401(k)s have proven to be not so wonderful retirement vehicles. For the average American population which relies on them for the bulk of their retirement planning, these investment vehicles have proven to be a tool that generally leads to a woefully underfunded retirement account that is highly sensitive to market volatility and has left many in bad positions with regard to their retirement security. Second, 401(k)s were never meant to stand alone. They were really meant to be a supplement to a more traditional pension system, but even as that has gone by the wayside for many, they are still intended to be on top of Social Security benefits. However, most Texas educators will not receive full Social Security benefits because neither the educator nor the state is paying into Social Security on their behalf. This leads to the final falsehood promulgated by retirement privatizers, that defined benefit pension plans simply cost too much. The truth is Texas has been getting by on the cheap for decades.

Retirement experts will tell you that you should be putting away around 25 percent of your pre-retirement income for use in retirement. Half of that amount, 12.5 percent, is normally covered by contributions to Social Security. Any reasonably good private employer will put up a match of 4 percent, or better, toward an employee’s individual retirement account, in addition to paying the required 6.25 percent employer’s share of Social Security. This means that these private employers are on the hook for a little more than a 10 percent toward their employee’s retirement. Likewise, their employees must also put the required 6.25 percent into Social Security and typically an additional 4 percent or more into their own retirement accounts to access the employer’s match. For years the state of Texas only contributed 6 percent, the constitutional minimum, into the TRS pension system. Thanks in large part to the work of ATPE the state bumped that contribution up to 6.8 percent a few sessions ago. However, at only 0.55 percent above what the state would otherwise have to pay into Social Security, Texas still contributes less than half of what the next lowest state not paying into Social Security pays towards it educators’ retirements. Most Texas teachers are themselves contributing 7.7 percent, or just 1.45 percent above what they would otherwise be paying toward Social Security, into their pension system. When you add in the 1.5 percent districts are contributing into the TRS pension plan, the total contribution comes to 16 percent. At 16 percent, contributions into TRS are substantially less than what even average employers and employees are contributing toward retirement, and despite being many educators only source of retirement income, that is only 64 percent of what experts recommend putting away. So far from being “too expensive” as some lawmakers insist, the TRS pension system has been an exceedingly good deal for the state of Texas.

This discussion is of particular importance at this moment because while TRS has been reasonably healthy for a long time and has been on track to be actuarially sound (very healthy) within the next five years, those statistics have been based on TRS’s current assumed rate of return of 8 percent. Based on the advice of the external actuarial firm with which TRS contracts, the TRS board is considering lowering that assumed rate of return. In order to maintain the positive trajectory of the fund, legislators will need to increase the contribution rate going into the fund. Per the discussion above, these increased contributions are long overdue, and had lawmakers increased them previously, the fund would be in a much better place today. Additionally, many retirees wouldn’t have gone more than a decade without a cost of living adjustment. If TRS lowers its assumed rate of return, however, the decision to increase contributions will no longer be a luxury; it will be an imperative. ATPE is advocating for this process to take place gradually over a number of years so that the increased contributions, corresponding to a gradually decreased assumed rate of return on investments, won’t be a shock the system for either the state or educators who will both share the burden of increased contributions.

Whether a gradual approach is taken or a more “one and done” approach is used, as is being advocated by TRS, the important thing is that educators stay fully engaged with their legislators, and in choosing their legislators this election year, so that the health of the pension fund is secured.

Making better use of the state’s rainy day fund when it’s not raining

The Senate Finance Committee met today to take up a number of Senate interim charges. Among them, the committee took up the charge to examine options to increase investment earnings of the Economic Stabilization Fund in a manner that minimizes overall risk to the fund balance and to evaluate how the Economic Stabilization Fund constitutional limit is calculated; considering alternative methods to calculate the limit, and alternative uses for funds above the limit.

the Texas Economic Stabilization Fund, often referred to as the state’s rainy day fund, is a mechanism that diverts a part of the severance taxes the state collects on oil and gas production and sets those monies aside to fill budget shortfalls resulting from temporary economic downturns. The fund, which has been used many times since its inception, has in recent years grown to approximately $11 billion, larger than at anytime in its history.

During the last session lawmakers facing stiff budget constraints began to discuss how they could better utilize the rainy day fund, other than continuing to stuff cash into the state’s proverbial mattress. One idea floated by Texas Comptroller Glenn Hegar was to take a portion of the fund and invest it as an endowment such that the investment returns could be used to help pay for state priorities, like shoring up the state’s pension funds. Legislators were not comfortable acting on that idea without more time to vet it.

In today’s hearing Hegar reintroduced the idea of investing the whole of the rainy day fund in very liquid assets that would allow for a return that roughly matches the inflation rate and investing a portion of the fund, in excess of what legislators think they might need quick access to, in less liquid assets that would generate a higher return. The Comptroller’s office predicts that an investment of $3 billion, with additional biennial investments over a certain threshold, would within 10 years accumulate to a fund that generates $1 billion a year in usable revenue. In 20 years, that projection jumps to more than $2 billion a year. The idea was received fairly favorably.

One of the things the state has used the rainy day fund for in recent years is to justify credit rating firms’ assignment of a AAA (the highest) credit rating to the state. Having a AAA rating allows the state and school districts through the Permanent School Fund (PSF) bond guarantee program to pay the lowest possible rate on bond debt. It was pointed out in the hearing however, that the rainy day fund is only one factor those firms look at when assigning a score. Another, more heavily weighed factor is the health/unfunded liabilities of a state’s pension funds. Both TRS and ERS need improvement to ensure the state is able to keep its current rating. A downgraded rating could cost the state billions in additional interest over the life of the state’s and school dostricts’ many bonds.