Texas Public Employees Association wants state employees to be aware of legislative activities and developments affecting your job and career. TPEA is sending this message to our members and to state employees who have participated at TPEA events and given us their e-mail addresses. TPEA also requested and received e-mail addresses as public information from a number of state agencies. If you do not wish to remain on this list, you can unsubscribe by following the instructions at the end of this email. REMEMBER: STATE EMPLOYEES SHOULD NOT USE STATE EQUIPMENT OR STATE TIME TO ENGAGE IN ANY TYPE OF LEGISLATIVE ADVOCACY EFFORTS. This message should not be printed, replied to, or forwarded using state equipment, unless allowed by your agency's policies and procedures. |
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The 79th Regular Session of the Texas Legislature adjourned sine die on Monday, May 30. The Legislature accomplished many of the priority goals set by Governor Perry, Lt. Governor Dewhurst, Speaker Craddick and the state’s legislative leadership. These accomplishments include: passage of a state budget for the 2006-2007 biennium in SB 1; enactment of comprehensive reform of the workers compensation system in HB 7; and reform of child and adult protective services in SB 6. The Texas House and Senate were ultimately unable to reach agreement on changing the state’s method for financing public education and lowering local property taxes. Consequently, there is some likelihood that Governor Perry may call a special session to work on school finance and other priority items that were not resolved during regular session. As many employees may already know, the outcome of this legislative session was very positive for state employees. Overall, state workers will receive 7 percent in salary increases over the next biennium. These increases, combined with the roughly 30 percent increase in longevity or hazardous duty pay, along with the maintenance of current state employee health benefits, should improve the economic well-being of every state employee. TPEA is proud of the key role it played in developing the employee pay raise package and working with the legislative leadership to make it a reality. Specifics on employee pay raises are outlined in the section below. In addition, the legislature approved funding to maintain current health insurance contributions and benefits for employees and retirees. While the Appropriations Act does require a 2 percent reduction in full time equivalent (FTE) positions in state agencies with more than 300 employees, legislators believe this can be managed through employee attrition rather than requiring forced staff reductions. Finally, the legislature took several actions, also detailed below, that should improve the actuarial status of the ERS retirement fund and, hopefully, accelerate the point in time when benefits for state retirees can be increased either through a 13th check or increased annuities. TPEA applauds the Legislature’s actions on state employee and retiree issues this session and encourages active and retired employees to write or call your legislators and other state leaders to express your appreciation for their efforts. All non-higher education state employees (including legislative employees) should receive a pay raise under provisions in SB 1. Most employees will receive the TPEA-recommended across-the-board raises, an initial 4 percent increase, with a $100 a month minimum increase, on September 1, 2005, and a subsequent 3 percent increase, with a $50 a month minimum increase, beginning on September 1, 2006. Certain groups of employees at particular agencies will not receive these across-the-board raises, but will benefit from other increases. All licensed peace officers on State Classification Schedule C will receive increases based on the new pay structure for Schedule C that was recommended by the Department of Public Safety Officers Association. In addition, attorneys at the Office of Attorney General, Child Protective Services investigation caseworkers, supervisors and direct delivery staff at the DFPS, Administrative Law Judges at SOAH and specific employee classes at the Credit Union Department and the Animal Health Commission will receive a different increase in pay. The second aspect of TPEA’s pay raise proposal was an increase in Longevity and Hazardous Duty pay. This increase includes higher education employees. Effective September 1, 2005 Longevity Pay will increase to $20 a month for every 2 years of state service (from $20 a month for every 3 years of service), and Hazardous Duty Pay will increase to $10 a month for every year of state service (from $7 a month). It is important to note that while SB 1863 changed state law to increase Longevity and Hazardous Duty pay, agencies were not appropriated additional funds in SB 1 for this purpose. TPEA discussed this issue with senior management at many state agencies and they were widely supportive of providing this increase in compensation for employees despite the financial difficulties it may create for agencies. TPEA applauds the leadership of Lt. Governor Dewhurst and Speaker Craddick, budget committee chairs Senator Steve Ogden and Rep. Jim Pitts, and the crucial work of Senator Tommy Williams and Rep. Joe Pickett in making the increases in state employee compensation a reality. TPEA had two primary goals with regard to retiree issues entering the legislative session. First, TPEA wanted to prevent enactment of those LBB Performance Review recommendations that would have been harmful to retirees. These included a proposal to require Medicare-eligible retirees to rely on the new Medicare Part D prescription drug benefit instead of the drug plan offered under ERS, and proposals to cut back the state contribution for retiree’s dependent health coverage. Second, TPEA wanted to improve the actuarial status of the ERS retirement fund to accelerate the time at which benefits for retirees can be increased either through issuance of a 13th check or approval of an annuity increase. With the support and involvement of our retired members, TPEA was successful on both fronts. Under SB 1 state retiree health benefits have been maintained for the 2006-2007 biennium and none of the adverse LBB recommendations were adopted. In addition, to help improve the status of the ERS retirement fund SB 1 increases the state retirement contribution for ERS to 6.45 percent from the 6 percent minimum level that the Texas Constitution requires. Finally, SB 1176, the ERS omnibus bill, makes a number of statutory changes that will further improve the actuarial status of the ERS retirement fund. Under current state law no increase in retirement benefits can be approved until the retirement fund has an unfunded liability of less than 31 years. The combination of an increased contribution rate and the statutory changes in SB 1176 will improve ERS’ actuarial status and should accelerate benefit increases for retirees. State Employee and Retiree Health Insurance Most legislative decisions regarding employee and retiree health benefits are contained in SB 1, the state budget. After all the painful and expensive changes that employees and retirees experienced last session, TPEA was able to work with legislators to essentially maintain our current health benefits. Premium contribution levels will stay the same, with the state contributing the full premium amount for the individual employee and retiree, and half the premium for dependent coverage. For the plan year beginning this September no increased co-pays or deductibles are anticipated. Information on ERS premium rates is available at the ERS web site. TPEA commends the excellent work of ERS Executive Director Ann Fuelberg and her staff, who have worked hard to help control spiraling health care costs and maintain affordable benefits for employees, retirees and their families. TPEA also worked to prevent enactment of legislation that would have required ERS to offer an optional high deductible health plan (HDHP) with an accompanying health savings account (HSA). This legislation, HB 1795, passed the House, but was not considered in the Senate. Later, these provisions were added to SB 1176 (the ERS omnibus legislation), but they were taken out of the bill in conference committee. TPEA is willing to work on new approaches to health care that truly lower costs. However, there is little current evidence to support the claims made by HSA proponents, and independent actuarial analyses indicated that an optional HSA would lead to adverse selection in the traditional state plan that would result in higher costs for participants. The legislature did pass HB 2772, which will require ERS to study HSAs and HRAs to determine if either is an effective tool for controlling health care costs. TPEA supports this study. One final change to state employee health coverage that was contained in SB 1863 allows employees and retirees who can demonstrate that they have comparable coverage to waive ERS health insurance and receive credit to purchase up to $60 a month in optional health coverage, including supplemental “wrap around” coverage for TRICARE military health coverage. It is not yet clear when ERS will implement this program. In its Performance Review report to the legislature, the LBB made a series of recommendations to eliminate longevity pay and benefit replacement pay (BRP) for return to work (RTW) retirees, and change accrual for annual leave as if RTW employees were new employees. These provisions were contained in six different pieces of legislation. HB 3540 was initially the vehicle for these changes. After passage in the House, TPEA and others worked with Senator Ogden to effectively “grandfather” RTW employees who retired prior to June 1, 2005 and returned to service by September 1, 2005. Under these provisions, longevity pay will be frozen at the amount a RTW employee receives this August, and qualifying RTW employees will maintain BRP and current-law annual leave accrual. Employees who retire after June 1, 2005 or who have not returned to service by September 1 will be ineligible for longevity, BRP and will accrue annual leave as if they were new employees. Near the end of the session, all the RTW issues were stripped out of HB 3540 in conference committee and inserted into SB 1863. Ultimately, HB 3540 did not pass, but SB 1863 was passed and sent to the Governor. SB 1863 not only “ grandfathered” current RTW employees, it contained the statutory changes necessary to increase longevity and hazardous duty pay in accord with SB1.
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