•Governor Calls Special Session on School Finance
•ERS Board Sets FY 2005 Insurance Premiums, Chooses HMOs
•TPEA Comments on HHSC Plans for Integrated Eligibility Determination
•TPEA Annual Meeting Will Offer Continuing Education Credits

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Governor Calls Special Session on School Finance
Governor Rick Perry called the 78th Legislature into its fourth special session on Tuesday, April 20, to create a new school finance structure, lower property taxes, and generate additional state revenues to replace lowered property taxes. The Legislature met in three previous special sessions last year to consider Congressional redistricting.

Special sessions last for 30 days unless the Legislature adjourns early. The Governor can call as many special sessions as he believes necessary. Although legislators can introduce legislation relating to any subject in a special session, legislation dealing with a subject that is not included in the Governor’s call is subject to a point of order that can effectively kill the bill.

Governor Perry’s plan to fund public schools and lower property taxes would eliminate the funding recapture provisions commonly known as “Robin Hood”, would lower both residential and commercial property taxes, and would cap increases in appraised value for residential property. The Governor’s plan would create a state property tax on commercial property that that would be used to help equalize funding between districts and would replace lost revenue from lower property taxes with revenue from an increased tobacco tax, video lottery gambling, and other revenue sources. The Texas House of Representatives and the Texas Senate are holding hearings on how best to fund public schools and to determine what revenue sources should be used to lower local property taxes.

There has been discussion of restoring some of the cuts in health insurance benefits for school district employees, and legislation to restore the $1,000 annual school employee health insurance supplement has been filed in both houses. TPEA believes that if there is any restoration of cuts for school district employees, there needs to be a comparable effort for state employees to offset increased health insurance costs. TPEA has asked state leaders for a health care salary offset of 3 percent or $65 monthly, beginning September 1, 2004, to partially defray the average annual $900 out-of-pocket health care cost increase that state employees have experienced.

ERS Board Sets FY 2005 Insurance Premiums, Chooses HMOs
The Board of Trustees of the Employees Retirement System took action on a number of issues of importance to state employees on April 21. The Board approved health insurance premiums for HealthSelect for FY 2005, which begins September 1, 2004, it selected participating HMOs for certain geographic regions of the state, and it set premium rates for these participating HMOs for FY 2005.

There is both good news and bad news to report. The good news is TPEA worked successfully with key legislators to prevent any increases in co-pays, deductibles or other out-of-pocket costs for next fiscal year. TPEA is also pleased that employees in three additional regions of the state will have an HMO option next year— eight counties in the San Antonio area, 26 counties in the Amarillo area, and four counties in the lower Rio Grande Valley area of South Texas. Current HMO providers will remain in the Abilene, Austin, Laredo, Lubbock and Waco regions. HMO premiums will increase for FY 2005, by 8.9 percent on average, but all are less costly than HealthSelect.

The bad news is ERS projected a $104 million deficit by the end of FY 2005, unless insurance premiums for HealthSelect were increased or other action taken. It’s important to note that because the state pays the entire premium for each employee and retiree, they will individually not see any increase in costs. However, the roughly 46 percent of members with any type of dependent coverage will pay more for their 50 percent share of those premiums.

ERS staff initially proposed a 7.14 percent increase in insurance premiums for FY 2005 to cover the projected shortfall. This would have increased monthly HealthSelect premiums for dependent coverage by from $8.20 to $20.43, depending on the type of coverage. TPEA argued that the staff recommendation was excessive, especially given all of the additional costs that employees and retirees have had to bear since last session. TPEA proposed that ERS develop other cost saving measures to minimize the impact of premium increases on employees. Thankfully, as the result of efforts by State Representative Joe Pickett of El Paso and House Appropriations Committee Chairman Talmadge Heflin of Houston, the actual increase ERS adopted was reduced to 5.13 percent. Under ERS’ initial proposal, monthly Member and Children premiums would have increased by $8.20 but will now increase only $5.89. Member and Spouse premiums would have increased by $12.23 but will now rise by $8.78, and Member and Family premiums would have increased by $20.43 but will increase by $14.67. TPEA appreciates the leadership of Rep. Pickett and Chairman Heflin to minimize the financial impact on employees and retirees.

For additional information on insurance premium costs, HMO options and other items, contact your agency’s human resource office or benefit coordinator or visit the ERS website at www.ers.state.tx.us.

TPEA Comments on HHSC Plans for Integrated Eligibility Determination
During hearings in Austin on Friday, April 30, TPEA provided testimony on the Health and Human Services Commission Business Case Analysis of the proposed Integrated Eligibility Determination system using call centers. The HHSC Business Case Analysis concluded that the state could save $389 million over five years by streamlining eligibility determination operations and utilizing up to four call centers. HHSC estimates that under its proposal approximately 4,400 fewer employees will be needed to determine eligibility for Medicaid, food stamps and other services.

TPEA’s analysis indicates HHSC utilized overly optimistic or unrealistic assumptions in reaching its conclusions and, consequently, estimated cost savings and staff reductions are significantly overstated. TPEA’s analysis also indicates HHSC failed to recognize a number of costs that will result from the proposal, further reducing any expected savings. TPEA will submit written comments detailing these concerns to HHSC prior to the deadline for submissions on May 16. TPEA will post these comments on our web site.

TPEA Annual Meeting Will Offer Continuing Education Credits
Texas Public Employees Association will hold its 59th Annual Meeting this summer in Austin, from June 25 to June 27. For the first time ever, the Annual Meeting will be accredited for professional development so that attendees can qualify for Continuing Education Credits. Interested state employees can request that their agency pay for the registration fee and possibly lodging. The registration fee is $85 until May 28, and $125 thereafter. TPEA’s Annual Meeting is a very cost effective way for agencies to provide professional development, particularly given the reduced agency training budgets.

The theme for this year’s Annual Meeting is “Celebration of State Employees”, which TPEA will kick off with a party for all state employees at Scholz’s Garten on Thursday, June 24, from 5 to 7:30 p.m. TPEA will provide complementary snacks and beverages, as well as offering live music by the “Go Getters”. Scholz’s Garten is located at 1607 San Jacinto in downtown Austin.