The financial burden of improving the financial footing of the Teacher Retirement System of Texas will be shared by the state, school districts and members under a Senate deal struck Wednesday.

Everyone will chip in a little more to shore up the $117 billion pension fund for school and university employees to quiet political rumblings that the state’s pensions are not sustainable.

“This is a very serious and I think long-term fix,” said state Sen. Robert Duncan, R-Lubbock, who chairs the State Affairs Committee and authored Senate Bill 1458. “What we’ll have is a fund that is more robust, that will be fundamentally sound.”

The combined effect of higher contributions and changes to retirement eligibility for employees with fewer than five years of service would improve the financial health of the fund enough to allow a 3 percent cost-of-living adjustment for some retirees. They last received a bump in their pension check in 2001.

The bipartisan Senate plan calls for the state to increase its contribution rate to 6.8 percent in 2014, up from the current 6.4 percent.

The members’ rate will gradually rise from 6.4 percent to 7.7 percent over the next four years.

And for the first time, school districts that do not participate in Social Security must contribute 1.5 percent toward their employees’ retirement.

The state has also found an additional $80 million to put toward retired teacher health insurance fund, which is projected to have $1.2 billion deficit come 2017.

Under an initial proposal, half of current employees would have been required to work until age 62 to receive full retirement benefits. They now have no minimum retirement age but must achieve the “Rule of 80,” in which their years of service and age equal 80, so some would have to work about a decade longer.

Duncan agreed to exempt all employees who will be vested in the retirement system as of 2014, but in turn all employees were being asked to increase their contribution from 6.4 percent to 7.7 percent in one jump.

Phasing in that increase was key to winning over the teacher groups and the Democratic support needed to get the bill to the floor.

“We’re not going to have an overnight dramatic increase. Instead, we’re going to ramp that up slowly and gradually,” said state Sen. Kirk Watson, D-Austin.

The Senate unanimously approved the bill and sent it to the House.

http://www.mystatesman.com/news/news/texas-senate-oks-teacher-pension-changes-to-shore-/nXkk6/

 

Texas ranks 49th in the nation in spending per student, according to research compiled by the National Education Association.

The professional organization put the state third to last in the ranking with the other states and Washington, D.C.

Arizona and Nevada spent less per child on education, according to the research, which was presented in a Texas State Teachers Association news release.

Texas spent about $8,400 per student this school year, more than $3,000 less than the national average, according to the data.

Two years ago, Texas spent almost $9,500 per student, which was about $1,600 less than the national average.

The report considers spending per average daily attendance or ADA, which is the way the state counts students for funding purposes.

Texas ranked 43rd in 2011-12 and 40th in 2010-11, according to the state association.

Texas State Teachers Association spokesman Clay Robison said it’s the disparity between the state funding and national average that concerns the organization’s leaders.

He said the difference per student amounts to about $66,000 less funding per Texas classroom if you consider a 22-student classroom.

Texas already placed in the lower half of the states when it came to per pupil spending before the 2011 budget cuts, he said. Now the state has almost doubled the difference between its per student spending and the national average.

“Money is important …” Robison said. “It helps pay for the things that keep the public schools running and contributes to a quality learning environment for the children.”

In a statement, association President Rita Haecker cited the state’s $8.8 billion surplus and a Rainy Day Fund balance of more than $11 billion as reasons why the state should restore the $5.4 billion that was cut from certain public education funding during the past legislative session.

However, local legislators took issue with the idea of a budget surplus. State Rep. Matt Schaefer, R-Tyler, said the surplus is minimal, if it exists at all.

State Sen. Kevin Eltife, R-Tyler, said in a statement that the talk of the budget surplus ignores the fact that Medicaid was short funded $5 billion last session and the state now has to pay that.

“We are in much better shape than last session, but we still do not have the huge surplus that everyone claims,” Eltife said. “I do want to see us put more money into public education and I do believe that will happen, but we are not in a position to restore all of the cuts that were made last session.”

Schaefer said the state’s 49th-place ranking must be put into context. As much as 85 percent of a school district’s budget can be spent on payroll, he said. So states that have a higher cost of living, likely will have higher salaries, and if the report isn’t adjusted for that, it’s going to skew the results, he said.

Robison said that cost-of-living differences are not factored into the data, and there are differences within the same state.

“That argument doesn’t change the fact that Texas state government does a poor job of funding public schools,” he said. “We are 49th (counting the District of Columbia) in per-pupil funding. Texas is not 49th in cost of living. Instead of quibbling about cost of living, legislators need to do a better job of funding schools.”

Citing a report by the conservative-leaning Texas Public Policy Foundation, Schaefer said public education funding has increased well above population growth plus inflation from 2000 to 2010. During that same time, the state’s average SAT scores declined slightly, Schaefer said.

“I have to say that we can’t always just say that more money is always the answer,” he said, adding that last budget cycle was an anomaly.

Schaefer said it’s too early to tell how much education funding could be restored this cycle. Part of the equation has to be looking at what’s happening with health-care spending and Medicaid, he said.

“Education is something that is the proper role of state government. … (And) we’ve got to fund it adequately,” he said. “My focus is to pull back some of the red tape on our schools that is making it difficult for them to spend money in a positive way.”

Eltife said he will continue to advocate that the state provide more funding for public education.

“We were faced with an unprecedented budget shortfall last session, and we did the very best we could with the resources we had to balance the state budget,” he said, according to the statement. “This included spending cuts to all state agencies.”