Senate Finance Committee takes action on retiree benefits

After a couple of weeks of inaction, the legislation to provide a benefit increase for retirees is back on the move. While full details have not yet been publicized, a proposed constitutional amendment to accompany the main retiree benefit bill passed out of the Senate Finance Committee on Thursday. The proposed amendment includes language providing benefit increases, but other parts of the proposed amendment could limit future increases.

HJR 2 would amend the Texas Constitution to provide more than $3 billion in funding to pay for a modest cost-of-living increase for retirees (between 2% and 4%) and a supplemental check for certain retirees (earlier proposals have suggested $7,500 for retirees over 75, or $5,000 for retirees over 70).

The details of the benefit increase will be included in Senate Bill 10, which is currently in conference committee negotiations.

The concerning part of HJR 2 is that it would limit the legislature's ability to provide benefit increases in the future by only allowing increases when two specific conditions are met: the retirement system must be actuarially sound, and the benefit increase must be fully funded by the Texas Legislature. Previous benefit increases have often been paid for through the pension system, rather than direct legislative appropriations, and this new requirement would restrict the legislature's ability to approve increases.

The HJR will return to the House for consideration of the Senate's changes, which including increasing the funding level from $1.9 billion to $3.3 billion. The House can accept the Senate version and send the bill to the governor for final approval or veto, or reject the changes and request the appointment of a conference committee.