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Overview of TPEA's Legislative Efforts During 77th Legislature

[Overview - Pay Raise and Increased Compensation - Employee Health Insurance]
[Retirement Benefits - Other Legislation of Interest to State Employees ]
[Conclusions and Lessons Learned]

Overview

TPEA adopted a highly focused three-part legislative agenda for the 77th legislature that included gaining a competitive pay raise for all state employees, maintaining health insurance coverage for employees, and raising the retirement multiplier for ERS and TRS.

As part of TPEA's ongoing organizational revitalization, TPEA's Board of Directors made the decision to focus resources on achieving legislative success. TPEA developed a multi-faceted program designed to improve the likelihood of achieving legislative success and to demonstrate that TPEA is the group most effectively advocating for all state employees. Toward this end, TPEA retained a media consultant, hired outside lobbyists, expanded grassroots advocacy efforts, and upgraded its publications, web site and electronic communications. TPEA members communicated effectively with legislators before and during the session, and TPEA leaders brought busloads of employees for legislative visits and set up crucial meetings with key legislators. TPEA also successfully broadened the circle of legislators who champion state employee issues, building stronger bipartisan support for TPEA's agenda.

TPEA is proud of the progress made this session on state employee issues. Following are described TPEA's legislative achievements, along with a specific explanation of how TPEA worked to gain these results, as well as credit and acknowledgement to the legislative leaders who made these efforts a reality.

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Pay Raise and Increased Compensation

Outcome:

Background:

Leading up to the legislative session, TPEA was highly successful in using the media to publicize the problem of state employee turnover. TPEA relied on the excellent data and reports from the State Auditor's Office to advocate for increased compensation for state employees. Public concern over employee attrition caused the Senate Finance Committee to hold a special nighttime hearing on the issue. TPEA members packed this special hearing. A working group chaired by Senator Barrientos, along with Senators Harris, Truan and Haywood, developed a proposal for a 5% across the board pay increase with a $100 a month minimum, with increased longevity pay and a special supplement for correctional officers and state law enforcement officers. Leadership by Lieutenant Governor Ratliff, and Senators Barrientos and Ellis was essential to getting the Senate version of the budget to include an across the board raise for all state employees.

The House version of the budget contained only targeted pay increases, principally including the establishment of new career ladders at TDCJ and TYC, as TPEA had recommended in April of 1999. Several other agencies were given "placeholder" increases in appropriations to allow for targeted increases for high turnover occupational categories.

The final decision on state employee compensation was made by the ten-member conference committee on Senate Bill 1, the General Appropriations Act. TPEA had identified the legislators most likely to serve on this conference committee before it was appointed and sent special advocacy mailings to TPEA members in likely House conferees' districts. The Senate members of the conference committee were uniformly in support of a pay raise for all state employees, they were: Sen. Rodney Ellis (D-Houston), Sen. Chris Harris (R-Arlington), Sen. Robert Duncan (R-Lubbock), Sen. Steve Ogden (R-College Station), and Sen. Judith Zaffirini (D-Laredo). The House conferees were Rep. Rob Junell (D-San Angelo), Rep. Buddy West (R-Odessa), Rep. Garnet Coleman ( D-Houston), Rep. Pete Gallego (D-Alpine), and Rep. Talmadge Heflin (R-Houston).

After considerable negotiation the conference committee initially approved a 4% or $100 per month pay raise for most employees, but indicated it would also adopt targeted raises along the lines of the House version of the budget.

TPEA then went back to work to try to improve this proposal by seeking support of a pay raise in both years of the 2002-2003 biennium as well as increased longevity pay. The key legislator in getting these objectives accomplished was Representative Talmadge Heflin (R-Houston). Rep. Heflin convinced the conference committee to make the initial pay raise proposal apply only to employees with 12 months or more of continuous state service. Rep. Heflin used the savings generated by this change to increase longevity pay for state employees from $20 a month for every five years of state service to $20 a month for every three years of service. In addition, Rep. Heflin proposed that if the economy performed better than expected that employees would receive another pay raise in fiscal year 2003. The conference committee approved a rider granting a contingent pay raise for FY 2003 of $65 a month for Schedules A and C, and 3% with a $65 minimum for Schedule B. Comptroller Carole Keeton Rylander must certify that sufficient revenue is available in order for the FY 2003 raise to take effect.

TPEA alerted members of the Senate Finance Committee that the proposed longevity changes would require a change in statutory law, in addition to a budget rider. TPEA then worked with Senator Robert Duncan to amend HB 2914 to permanently change the longevity pay provisions. TPEA also worked to assure that agencies receiving funding for targeted pay raises were actually appropriated sufficient monies for the raises. Aside from the TDCJ and TYC career ladder proposals, other agencies had been given "placeholder" funding amounts in the House version of the budget that were substantially less than the true costs of the targeted raises. Based on TPEA's efforts, TXMHMR was appropriated $17.2 million to reclassify direct care staff by one pay group, and DPRS was appropriated $11.7 million to improve pay and reduce turnover among Protective Services Specialists and other critical occupational categories. Both agencies had only been appropriated $3.9 million as "placeholder" amounts.

Although the legislature did adopt TPEA's concept for a career ladder for Correctional Officers and upgrades for ranking staff, the version that was adopted does not go as far as TPEA had proposed, nor does the final budget include COs and ranking staff in the across-the- board raise that other state employees received.

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Employee Health Insurance

Overview:

Background:

The overall increase in health care costs was perhaps the major force driving state finances during the 77th legislature. The state uniform group insurance program (UGIP) was not immune to this problem. During the year prior to the session ERS had estimated that it would require roughly $500 million in new funding to maintain health insurance for state employees. By the time budget deliberations were under way, ERS had raised its estimate of the amount of new funds that would be needed to maintain the insurance program to roughly $750 million.

The House Appropriations Committee Subcommittee on General Government oversaw budget markup of ERS. Under the leadership of subcommittee chairman Talmadge Heflin (R-Houston), and with the support of Rep. Kino Flores (D-Mission), Rep. Vilma Luna (D-Corpus Christi), Joe Pickett (D-El Paso) and Rep. Robert Puente (D-San Antonio), TPEA was able to reach agreement on a funding level that should not cause any increases in co-pays, deductibles or other out-of-pocket costs, even though it does not fully fund ERS budget request. TPEA defeated efforts to increase out-of-pocket costs substantially, and worked successfully to maintain the state's share of premium payment at 100% for the employee/retiree and 50% for dependents. It is important to note that costs for dependent coverage will increase, since the state will continue to pay for half of the premium for dependents, and health care costs have been increasing at double digit rates annually. Although the Senate version of the budget had a provision to allow use of funds in the state's "Rainy Day" fund to cover any shortfall that ERS might experience, the conference committee adopted the House version of funding for ERS.

Based on the efforts of Rep. Glen Maxey (D-Austin), the health insurance premium for children eligible for SKIP will decrease from 20% of the premium cost of dependent coverage to $15. SKIP is the State Kids Insurance Program that was established in 1999 to allow families with lower incomes to better afford insurance coverage for their children.

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Retirement Benefits

Outcome:

Background:

TPEA's primary emphasis with regard to retirement benefits was to increase the retirement multiplier for both ERS and TRS, and to assure an adequate annuity increase for current retirees. The omnibus ERS bill, SB 292, was authored by Senator Ken Armbrister (D-Victoria) and carried in the House by Representative Barry Telford (D-DeKalb). Senator Armbrister and Representative Dale Tillery (D-Dallas) carried the omnibus TRS bill, SB 273.

Legislative leaders established an unwritten policy of parity in retirement multiplier rates between ERS and TRS. This meant that the ERS multiplier could not be increased unless the TRS multiplier was raised to the same level. Thanks to the efforts of the sponsors of the wo bills, and timely assistance by Senator Todd Staples (R-Palestine) and Lt. Governor Bill Ratliff, an agreement to raise both systems multipliers to 2.3 was reached at nearly the last possible point in the legislative session.

Current retirees will have their annuities recalculated to reflect inflation using the CPI-U, and also based on increases in the multiplier rate and reduction factors that have occurred since retirement. ERS customer service representatives will be able to help retirees answer specific questions about changes in benefits at 877-275-4377 or 800-252-3645. State law was also changed to allow retirees to authorize a monthly deduction from their annuity for TPEA membership dues.

Along with the multiplier increase for ERS the provision that has generated the most interest among employees is the membership service credit provision of SB 292. This provision allows members with at least ten years service to purchase up to five years service credit at the actuarially determined present value cost of the additional standard retirement annuity benefits attributable to the service purchased. This provision has been misconstrued as an early retirement incentive-it is not. ERS will be creating tables to show how much service credit will cost prior to the effective date for purchases on January 1, 2002.

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Other Legislation of Interest to State Employees

SB 587 (Sen. Duncan/Rep. Christian) passed and sent to the Governor. Repeals limitations on retirees who return to work.

HB 1217 and SB 360 that would have required all agencies to begin privatizing "commercially available services" never made it out of committee.

HB 2031 that would have undermined the ERS retirement system by creating a defined contribution plan only for new employees never made it out of committee.

HB 568 (Rep. Gallego) would have increased monthly vacation accrual by an hour and vacation carryover by 12 hours a year, failed to make it out of Senate Committee.

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Conclusions and Lessons Learned

Although TPEA did not achieve everything it set out to accomplish during the 77th Legislature, significant success and progress was made on each of TPEA's legislative agenda items. This session marked a significant departure in the treatment of state employee issues and in the amount of resources directed to benefit them. Totaling the across-the-board pay raise ($511 million), the career ladder and other upgrades at TDCJ and TYC ($120 million), the targeted raises at DPRS, TNRCC and other agencies ($58.5 million), and increased longevity pay ($80 million), shows that roughly $770 million is increased compensation was approved this session. This is in addition to the nearly $700 million in new funds for employee health insurance. The contingent pay raise for 2003 amounts to another $180 million in potential increased compensation for state employees.

TPEA's efforts mark the beginning of the process to regain the ground lost over the last decade. State government didn't get into its current position overnight and it will take more than one session to fix.

TPEA was the organization responsible for the progress made on state employee issues this session. There were a number of keys to this success. TPEA staff developed an effective campaign plan that focused resources to achieve legislative objectives. TPEA was able to expand the bipartisan support for state employee issues among legislators and other state leaders from both parties. TPEA also went back to basics to inform our membership on the issues and mobilize them to participate in grassroots advocacy. TPEA improved its traditional means of communication and added new electronic media to enhance communication. TPEA's highly focused agenda also enabled efficient use of limited resources and imposed discipline on staff. Finally, the decision by the Board of Directors to authorize resources to retain outside legislative representation and media services clearly contributed to TPEA's success. The key to continuing this progress is building membership to increase resources and motivating state employees to act as grassroots advocates on their own behalf.