The Texas Senate Finance Committee approved a bill Saturday that would give Texas teachers raises and bonuses and pump millions into the Teacher Retirement System, despite a tepid reception from teacher groups.
Senate Bill 19 passed 10-3, mostly along party lines. Sen. Juan “Chuy” Hinojosa, D-McAllen was present but didn’t vote. Sen. Royce West, D-Houston, was absent during the vote.
“Recruiting and retaining the best and the brightest to the teaching profession should be the … best use of our education dollars,” said Sen. Jane Nelson, R-Flower Mound, chairwoman of the Finance Committee and author of the bill.
Much of the discussion among committee members centered on the state’s beleaguered health insurance system for retired teachers. The insolvency of the system has led to higher premiums and deductibles for retirees that will go into effect in January. The bill would pump $212 million into the system to cut in half expected deductibles for retirees under the age of 65 to $1,500 and lower premiums for retirees over 65 by $25 to $121.
Sen. Kirk Watson, D-Austin, said that he was concerned the panel was not making a strong enough commitment to retirees because funding for the bill is not guaranteed after 2019. Brian Guthrie, executive director of the retirement system, told the panel that even with SB 19, the system faces at least a $500 million shortfall in the 2020-2021 biennium and about $2 billion by 2022-2023.
“The way to make it a commitment would be to raise the state statutory contribution rate. I don’t see it in SB 19,” Watson said.
Tim Lee, head of the Texas Retired Teachers Association, said he hoped for a solution even if lawmakers might disagree on tapping the $10-billion state savings account — the Rainy Day Fund — to fund it. Nelson said using the Rainy Day Fund was off the table.
“It would be a false promise to our teachers. We want to figure out a permanent solution,” Nelson said.
Representatives of teacher groups testified that they couldn’t fully support the bill because it gives all teachers a $1,000 pay raise but without extra funding from the state.
According to Nelson’s office, the Legislature next session will have to decide how to pay for the bill’s $750 million pay raise provision, which wouldn’t take effect until the 2019-2020 school year.
Tonja Gray, an intervention specialist for the Abilene school district, said that she doesn’t want the raise if it means that school districts would have to cut student programs and staff positions to pay for it. “I don’t want a pay raise on the back of my students,” she said.
Nelson responded that she couldn’t believe that teachers wouldn’t want the extra money. “It’s this or nothing,” she said.
Also under the bill, $193 million would be spent over the next two years to give $600 annual bonuses to teachers who have six to 10 years of experience and $1,000 annual bonuses to teachers with at least 11 years of experience. Lt. Gov. Dan Patrick, who introduced the main points of the bill in a news conference earlier this month, has said that retirees also would receive a bonus but Guthrie said on Saturday that under state law, retirees can’t get an increase in their pension through the teacher retirement system until the system pays off its existing liabilities.
The state would pay for the active teacher bonuses and retiree health cost provisions in the bill through delaying payments to Medicaid managed care organizations until the start of the 2020-2021 biennium. Texas Health and Human Services Commission officials said during the hearing that they don’t expect services to be affected through this method of financing.
Patrick has said he hopes the plan would eventually be paid for through lottery money, which voters must OK, and reordering priorities in school district budgets.