State Employee, Retiree Issues Up for Interim Study
November 5, 2015
Lt. Gov. Dan Patrick and Speaker Joe Straus have each released interim charges directing House and Senate committees to research specific topics that require more in-depth study than the limited time a legislative session allows.
Interim charges provide clues as to legislative priorities and sometimes reflect what the leadership considers unfinished business from the previous session. Charges in both chambers pertain to issues of great importance to active and retired state employees, including retirement benefits and health coverage. Next year, the committees will release their findings on each charge, and those findings could become the basis for legislation.
As your voice at the Capitol, TPEA closely monitors and participates in the interim committee process. We will seek member input on these issues, and our lobby team will convey the viewpoints of active and retired state employees to the Legislature. As always, TPEA is focused on the three areas affecting state employees—compensation, health insurance and pension—and the effect that any proposed changes would have on employee turnover and the State’s ability to attract and retain a qualified workforce. TPEA is also focused on ensuring that retired state employees continue to have access to the benefits they earned during their years of public service.
Stay tuned for TPEA updates throughout the interim committee process.
Interim charges relevant to active and retired state employees
Senate interim charges (released in mid-October)
Finance Committee
Review the budgeting format of other states, such as whether they use strategy-based budgeting, program-based budgeting, or some other approach, and discuss the level of transparency with each approach. Review and make recommendations to reduce state debt liabilities, including state pension liability. Consider how to incentivize state agencies, boards and commissions to identify and realize savings to taxpayers.
State Affairs
Union Dues: Examine the practice of using public funds and employees for the payment processing of union dues. Make recommendations on whether Texas should end this practice.
The Senate State Affairs charge pertaining to union dues is a follow-up to a Senate bill that did not pass during the 84th legislative session. That bill would have eliminated the payroll deduction of union dues as well as dues for nonunion, nonpartisan membership associations such as TPEA. The House State Affairs Committee has also received a charge to examine payroll deductions from public employee paychecks (see below), though TPEA notes that the House charge is broader and also includes a study of charitable/nonprofit contributions via payroll deduction.
House interim charges (released Nov. 4)
Appropriations
Monitor the implementation of HB 9 (84R) and study updated projections towards actuarial soundness of the Employees Retirement System. Examine issues and costs associated with granting cost of living adjustments or “13th Checks” to retired state employees and teachers.
Insurance
Review the implementation of HB 2929 (83R) [relating to health benefit plan coverage for brain injury]. Examine the bill’s impact and compliance among affected health plans. Examine the costs incurred by the Employees Retirement System, Teacher Retirement System, and any other affected state health plans as a result of the legislation.
Pensions
- Study the impact that fluctuations in global financial markets have had on public pension funds. Analyze assumed rates of return on investments, structures among asset classes, long-term and shorter-term investment goals, and make appropriate recommendations to ensure the investment structure of public pension funds are meeting fiduciary responsibilities.
- Examine Texas pension funds’ compliance with Governmental Accounting Standards Board (GASB) Financial Reporting Statements 67 and 68, and identify the effect the reporting requirements are having on the state’s pension systems.
- Examine the immediate and long-term fiscal impact to the state of the unfunded liabilities for the Law Enforcement and Custodial Officer Supplemental Retirement Fund (LECOS) as part of the Employees Retirement System of Texas (ERS). Make appropriate legislative recommendations.
- Examine the fiscal and policy impacts of structural reforms that would increase state public pension plans’ ability to achieve and maintain actuarial soundness. Evaluate the feasibility, costs, and benefits of utilizing one-time funding increases to reduce or eliminate unfunded liabilities.
- Evaluate the investment performance benchmarks utilized by the state’s pension funds and the impact portfolio diversification and short- and long-term market assumptions have had on achieving expected investment returns. Analyze the fee structure and investment strategy for various investment classes to ensure the costs are reasonable and competitive versus other large public and private pension trust funds.
- Conduct legislative oversight and monitoring of the agencies and programs under the committee’s jurisdiction and the implementing of relevant legislation passed by the 84th Legislature. In conducting this oversight, the committee should: a) consider any reforms to state agencies to make them more responsive to Texas taxpayers and citizens; b) identify issues regarding the agency or its governance that may be appropriate to investigate, improve, remedy, or eliminate; c) determine whether an agency is operating in a transparent and efficient manner; and d) identify opportunities to streamline programs and services while maintaining the mission of the agency and its programs.
Public Health
Study the impact of chronic disease in Texas and identify the major regional chronic health challenges. Review the types of health data collected by the state related to chronic disease and how the data is utilized to improve health care. Study state programs targeting chronic disease, including the Texas Health Improvement Network, and identify the direct and indirect costs associated with obesity, tobacco, and other related chronic health conditions including impacts to Medicaid, Employees Retirement System, Teacher Retirement System, University of Texas System, and Texas A&M University System. Identify public health interventions for chronic disease and preventative healthcare services that improve health outcomes and reduce cost.
State Affairs
Examine payroll deductions from state or political subdivision employees for the purpose of labor organization membership dues or fees as well as charitable organization and nonprofit contributions. Determine if this process is an appropriate use of public funds.
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