Employee & Retiree Action Alert!

February 15, 2005

•Get Informed on the Issues

•Get Involved by Calling Key Legislators

•Tips and Talking Points for Communicating with Legislative Offices

Get Informed on the Issues:

Even though it is early in the legislative session, TPEA believes that crucial decisions about employee pay raises and possible cuts to employee and retiree health benefits may be made in the next several weeks. It is vitally important that key decision makers hear from state employees and retirees in large numbers. TPEA now believes that legislators intend to provide some sort of pay raise, but the size and structure of how this will be done hangs in the balance. Similarly, while TPEA has worked hard to undermine the health insurance cost-shifting proposals made by the LBB, legislators are under great pressure to find ways to cut spending, and several adverse recommendations are still being seriously considered.

Pay Raises
TPEA believes all employees should get adequate across-the-board pay raises in both years of the upcoming biennium, and that longevity and hazardous duty pay should be increased. TPEA is concerned about proposals that would only grant raises to certain groups or job categories and ignore other groups and categories entirely, even though they may have higher turnover. TPEA is proposing pay raises of 4.5 percent, with minimum monthly increases of at least $100, in both years of the 2006-2007 biennium. TPEA is also proposing an increase in longevity pay to $25 per month for each two years of service, and an increase in hazardous duty pay to $12.50 per month for each year of service. See TPEA’s policy paper on how to structure pay raises to maximize state personnel goals (click here to download the pdf).

There is a strong factual basis supporting the necessity for employee pay raises. Employees have only received three across-the-board raises in the past dozen years, the last having been awarded on September 1, 2001. State employee compensation lags behind that paid for comparable work by other public and private employers by 17 percent on average. As a consequence, employee turnover has soared, averaging over 16 percent for the past five years, and costing the state an estimated $345 million in FY 2004 alone. Employees are also bearing a much greater share of health care costs, with out-of-pocket costs having increased, on average, by $900 annually since May 2003.

Health Insurance
ERS recently informed the legislature that it can maintain current health care benefits for employees and retirees with the funding level contained in the introduced versions of the budget, SB 1 and HB 1. This is good news for budget writers and, hopefully, for state employees, since ERS had previously estimated it would need approximately $200 million more. This revised forecast results from two factors. First, ERS recently awarded two contracts that significantly reduced costs, for its pharmacy benefits manager, with Medco Health Solutions, and for administrator of the state’s self-funded health plan, HealthSelect, with Blue Cross Blue Shield of Texas. Second, because of all the increases in out-of-pocket health care costs, employees and retirees are using relatively fewer drugs and medical services and utilization and costs are below projections.

Taken together the recommendations in the recent LBB Performance Review (Click here to download a PDF of the report. Warning: only download if you are on a high-speed connection) would shift hundreds of millions of dollars of additional costs to employees and retirees and materially alter the agreement under which people worked for and retired from the state. See TPEA’s position on the LBB Performance Review recommendations (Click Here to download TPEA's recommendations). Of particular concern for active employees is the proposal to reduce the state’s share of individual employees’ insurance premium contributions from 100 percent to 90 percent, costing employees roughly $31 monthly. For retirees, the primary threat is the proposal to take away drug coverage for retirees and force them to utilize the new federal drug coverage under Medicare Part D. This would result in significantly higher drug costs for most retirees.

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Get Involved by Calling Key Legislators:

Because time is of the essence, phone calls are most effective way to communicate your concerns. Please make it apparent that you are calling on your own time, not state time, and that you aren’t using state equipment.

In the Texas House, the Appropriations Subcommittee on Government Efficiency and Operations is looking at both the pay raise issue and examining the LBB Performance Review to assess whether any LBB recommendations should be implemented by the full House Appropriations Committee.


The members of the Subcommittee on Government Efficiency and Operations are:

Chairman Carl Isett of Lubbock, (512) 463-0636,
Rep. Glenn Hegar of Katy, (512) 463-0657,
Rep. Aaron Pena of Edinburg, (512) 463-0426
Rep. Joe Pickett of El Paso, (512) 463-0596
Rep. Todd Smith of Bedford, (512) 463-0522
Rep. Vicki Truitt of Southlake, (512) 463-0690.


In addition, the Appropriations Subcommittee on General Government will have final say on recommended appropriations levels for ERS and employee health benefits. Members of this Subcommittee and phone numbers are:

Chairman Warren Chisum of Pampa, (512) 463-0736,
Rep. Leo Berman of Tyler, (512) 463-0584,
Rep. Peggy Hamric of Houston, (512) 463-0496,
Rep. Jose Menendez of San Antonio, (512) 463-0634,
Rep. Joe Pickett of El Paso, (512) 463-0596.


In the Senate, a Work Group comprised of three Senators will make recommendations regarding pay raises and any changes to health insurance. The members of this group and contact information are:

Team Leader Senator Tommy Williams of the Woodlands (SD 4, parts of Montgomery, Harris, Chambers and Jefferson counties, all of Orange and Liberty counties.) Austin office phone (512) 4630104. Capitol office Room GE.7.
Senator Gonzalo Barrientos of Austin (SD 14, part of Travis County.) Austin office phone (512) 463-0114. Capitol office Room 3E.18.
Senator Kim Brimer of Ft. Worth. (SD 10, part of Tarrant County.) Austin office phone (512) 463-0110. Capitol Extension Room E1.810.

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Tips and Talking Points for Communicating with Legislative Offices:

Please be polite and respectful. Ask to speak with the Senator or Representative, especially if he or she represents you. In most instances you will speak with a staff member. You can ask to speak with a staff member who works on appropriations issues. Make it very clear that you are calling on your own time and expense, not state time or using state equipment.

Tell them that state employee have only had three pay raises in the past 12 years and that state pay now lags behind that paid by other public and private employers by at least 17 percent. Tell them that TPEA has a pay raise proposal and that you want their support for the TPEA plan. In particular, it is vital that the Legislature grant raises to all employees in both fiscal years 2006 and 2007, and that longevity and hazardous duty pay be increased.

In addition, tell them that you support full funding for employee and retiree health benefits, without any of the cost-shifting recommendations made in the LBB Performance Review. Remind them that state employees and retirees have absorbed, on average, a $900 increase annually in out-of-pocket health care expenditures but haven’t received a pay raise since September 1, 2001. Reducing the state’s contribution for employee health insurance is equivalent to a pay cut. For retirees, efforts to force Medicare-eligible participants to utilize the new federal Medicare Part D drug coverage will substantially increase drug costs and will break the agreement that employees and retirees had in working for and retiring from the state.

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