Otto filing bill to fund retired teacher health care

Names

House Appropriations Chairman John Otto, R-Dayton.

Updated 6:35 p.m.:

The Texas House’s lead budget writer filed legislation Monday that would fully fund a state health care plan covering more than 250,000 retired teachers and their dependents.

House Appropriations Committee Chairman John Otto, R-Dayton, said late last month the lower chamber wants to pick up the entire $768 million tab for TRS-Care over the 2016-17 biennium. Texas Senate leaders have indicated they will do the same.

The money will be included in House Bill 2, Otto said Monday at a committee meeting.

Securing that sum was one of the main goals of teacher groups this session, although they have called it just a first step. The Legislature also needs to overhaul the plan structure to make it financially sustainable for the long-term, those groups have said.

Teacher Retirement System Executive Director Brian Guthrie brought the same message to the House Pensions Committee Monday, where he laid out seven options for shoring up the fund.

“I would argue that we need to make systemic changes to the this program now in order to provide for the longer-term sustainability and we may not get this in one session, but whatever we can do to start down that path — if you put it off, the hole is just getting bigger.”

On Monday, Otto also said that discussions still are ongoing about how exactly to use the additional $2.2 billion the House has allocated for schools in its starting point budget. He also assured the panel that the money will definitely be spent on public education.

The sum, consisting entirely of local property tax revenue, is in addition to the $2.3 billion needed to fund enrollment growth over the 2016-17 biennium — about 85,000 new students a year.

The $2.2 billion has been “earmarked for improving equity and reducing recapture in our public schools,” state Rep. Trent Ashby, R-Lufkin, the House’s lead education budget writer, reminded the committee.

Otto indicated as much earlier in the legislation session, which began Jan. 13.

“I expect in the not too distant future you will be seeing what the anticipated use of this $2.2 billion” is, Otto said.

“It is the chair’s intent that that $2.2 (billion) go to public education,” he continued. “It is not going to be pulled back off the table regardless of what we do.”

Rep. Donna Howard, D-Austin, called the move “a very strong statement” and said she is “very appreciative.”

However, the former Eanes school district trustee emphasized that the $2.2 billion, as well as the nearly equivalent sum covering enrollment growth, is local — not state — money.

“I point that out because I think we need to just keep in mind the fact that we are still relying a lot on local property taxes to cover the cost of public education and at least in this case the chairman is putting it to public education rather than spending it on something else which is a huge step in the right direction,” she said, referring to the Texas Senate’s plan to return that money to local taxpayers in the form of property tax cuts. “One of the most significant things we could do to help our property taxpayers is to find state revenue sources that would decrease the amount that we’re relying on from the local property taxpayers.”

In response Otto said: “To my knowledge this is the first time since I’ve been here that we have fully restored all of the appraisal increase money back to public ed, so I think it is a good first step.”

During the meeting Monday, Ashby also announced that his Appropriations subcommittee had heard testimony from every higher education institution and had attempted to address their “top two priorities,” which he said were “increasing funding formulas as well as tuition revenue bonds.”

The subcommittee “added approximately $224 million to increase all the formulas including a 93 percent hold harmless of our community colleges,” he said. “For tuition revenue bonds we included $250 million for debt service contingent on legislation authorizing the bonds.”

He said the subcommittee also added about $50 million for financial aid programs, with the bulk of that going to the Texas Educational Opportunity Grant program. That is on top of the $41.3 million the House already allocated for TEOG and TEXAS Grants in its base budget, he noted.

Howard also praised the funding formula increase, but noted it is nowhere close to what would be needed to restore deep cuts made to higher education institutions in 2011. She said that would take $1.42 billion.