Watson promises pension help, Moody’s offers warning

State Sen. Kirk Watson, D-Austin

State Sen. Kirk Watson, D-Austin

Jubilant about his first-ever appointment to the powerful Senate Finance Committee late last week, Austin state Sen. Kirk Watson on Monday said his new position is “a great opportunity for me to push for an honest budget that provides for property tax reform, addresses our troubled school finance system and invests in our colleges, universities and aging infrastructure.”

In his weekly email update, the Democrat also said he’ll “be in a position to protect the pensions and health care of our state employees and teachers.”

State employees in particular are facing the possibility of higher pension costs and/or lesser benefits as lawmakers figure out how, and whether, to work toward making the Employee Retirement System actuarially sound so that contributions and investment returns cover expenses and payouts.

At a legislative hearing last month, outgoing ERS Executive Director Ann Bishop warned lawmakers that the plan’s current unfunded liability of $7.5 billion could at some point affect the state’s good credit rating if the Legislature doesn’t devise a plan to pay it off by either increasing contributions, cutting benefits or both.

A recent report from Moody’s Investors Service, one of the three main credit rating agencies, reached a similar conclusion.

Texas “and some of its local governments’ record of contributions below actuarial levels will drive rising pension costs for those entities,” begins the report, which found that Texas has the 14th highest public pension liability in the U.S. with costs driven largely by ERS and the Teacher Retirement System.

The report notes that ERS has requested a 59 percent, $350 million increase in the state’s contribution rate for the 2016-17 two-year budget cycle “in order to meaningfully reduce the growth rate of the plan’s unfunded liability.”

Several key House and Senate lawmakers, Democrats and Republicans alike, have mentioned the issue as a priority in interviews with the American-Statesman, but also have said it will ultimately compete with big-ticket wants like tax cuts and transportation funding.

A first draft budget that House Speaker Joe Straus unveiled earlier this month covers only the normal cost of the plan — far short of the cash infusion it needs to be shored up. (Check out the exceptional requests comparison chart at the bottom of this document).

State Sen. Kirk Watson, D-Austin

State Sen. Kirk Watson, D-Austin

 

 

Reader Comments 0

12 comments
austingoober
austingoober

wATSON WON'T BE ABLE TO ACTUALLY INCREASE FUNDING FOR AnY OF THE THINGS HE MENTIONS THAT WOULDN'T HAVE HAPPENED ANYWAY. His truth in budgeting ideas may happen, but that's because he never understood the budget and all it does is reduce the state's overall fiscal capacity. That's why right wing think tanks support this approach. He won't get a dollar for pensions, and he won't be a player on retiree health benefits. Higher Ed may get some more money, but not because of Watson. The last time Watson acxtually got anybody new money was his efforts to give money upfront for the franchise fee for the Circuit of the Americas racetrack, $25 million to Bernie Ecclestone the world's oldest and richest playboy.

The Turkey Vulture
The Turkey Vulture

Good luck, Senator Watson!  You're gonna need it.  Unfortunately our state government is overrun this session by a bunch of idiot Teabaggers who think you can get blood out of a turnip.  They will ruin this state if not stopped.

Whodunnit
Whodunnit

Watson won't be doing anything with State $$$.  We should probably terminate the defined benefit pension plans thi session and go 401(k) type retirement income benes for State workers and teachers.

rant-and-rave
rant-and-rave

He acts like a baptist preacher going into a strip joint on a so-called research mission so he can tell the rest of the congregation what goes on in the VIP room. 

PuddyTat
PuddyTat

If there's enough money to fund the cancer profiteering institute and scholarships to private colleges then there's enough for a healthy retirement fund.

cheat-to-win
cheat-to-win

Except when he is advocating for the 1 percent -- more and more often where you will find the former progressive Watson -- he is completely marginalized in the state Senate. He's already lost big time on the 20-vote rule (he could not even keep the Democratic caucus together on that), and he got no chairmanship despite his seniority. Watson will be as effective in the Senate this year as the late Teel Bivins.

Lifelong-Austsinite
Lifelong-Austsinite

@Whodunnit Obviously you are not a teacher or state retiree. Government might as well pull the rug out from under all those folks who put in 30 or more years working for the state or teaching and were told they would have a retirement check until death. Well, you know the government always lies to the people.  I wish Senator Watson the best in his effort. 

hosneg
hosneg

@Whodunnit  Starting with elected officials and judge at all levels.


rant-and-rave
rant-and-rave

Actually he looks and sounds like a baptist preacher.