Texas Senate Passes Budget, Including Employee Pay Raises

On Wednesday, March 23 the Texas Senate unanimously approved SB 1, the General Appropriations Act for the 2006-2007 biennium. Totaling over $139 billion in all funds, SB 1 restores a number of cuts to health and human services programs made during the previous legislative session, adds significant funding for state-supported institutions of higher education, and funds enrollment growth for public schools.

With regard to state employees, SB 1 contains a pay raise package that closely mirrors TPEA’s proposal. It includes two across-the-board pay raises of 4.5 percent with $100 a month minimum increases, granted on January 1, 2006 and January 1, 2007. This would apply to all general government state employees on Salary Schedules A and B. Schedule C employees will receive separate pay increases based on a proposal by the Department of Public Safety Officers Association.

For clarification purposes, a previous TPEA e-mail indicated the pay raises would apply to non-exempt employees, this refers to positions that are exempt from the state classification plan and does not relate to whether a position is FLSA exempt. Agency executive directors are exempt from the state classification plan, but all other state employees would receive the pay raises under the Senate plan. TPEA believes all legislative employees would also be covered by the pay raises.

SB 1 also increases longevity pay to $20 a month for every two years of state service, and hazardous duty pay to $10 a month for each year of state service, although agencies will be required to pay for this increase out of their appropriated funds. Enabling legislation has been filed in the Senate and the House to increase longevity and hazardous duty pay, SB 1567 by Sen. Williams (R, The Woodlands) and HB 3008 by Rep. Pickett (D, El Paso).

SB 1 also increases the state retirement contribution rate for ERS to the normal cost level of 6.45 percent, which should help move ERS’ retirement funds toward full funding, thereby improving the chances that ERS will be able to increase benefits for state retirees. The impact of SB 1 on employee health benefits is discussed below. SB 1 now goes to the House of Representatives.

TPEA appreciates the hard work and leadership of the Senate on this issue. TPEA commends, and asks state employees to voice their appreciation to, Lt. Governor David Dewhurst, Finance Committee chairman Steve Ogden (R, Bryan), working group leader Senator Tommy Williams (R, The Woodlands) and his working group colleagues, Senators Kim Brimer (R, Fort Worth) and Gonzalo Barrientos (D, Austin), as well as all the members of the Texas Senate who supported SB 1.

Finally, it is important that state employees realize that while the Senate proposal is an excellent first step in achieving meaningful compensation increases for state employees, this is only the first major step in the process, and much work remains. As noted below, the House approach to pay raises differs substantially from the Senate’s, and the two houses will ultimately have to reach agreement on these issues in the conference committee on SB 1.