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Rep. Canales calls on Gov. Abbott to declare healthcare for current and retired teachers an emergency item in upcoming legislative session - Titans of the Texas Legislature

Featured: Gov. Greg Abbott addresses elected officials and business, law enforcement and community leaders on Tuesday, September 18, 2018 during the grand opening and building dedication of the South Texas College Regional Center for Public Safety Excellence in Pharr.


Rep. Canales calls on Gov. Abbott to declare healthcare for current and retired teachers an emergency item in upcoming legislative session

Rep. Terry Canales, D-Edinburg, continues to call on Gov. Greg Abbott, a Republican, to declare health insurance funding and pensions that affect more than 600,000 current and retired teachers and their dependents as emergency items for the Texas Legislature when it returns to work on Tuesday, January 8, 2019 for its 140-day regular session.
A session is the period during which the Texas Legislature meets.
The regular session convenes every odd-numbered year, and may last no more than 140 days.
“Earlier this year, I wrote to you requesting a special session of the Texas Legislature so that we could immediately address the health insurance crisis facing our current and retired teachers and other public-school employees. I followed up that letter with a request to also make adding additional funding for that purpose an Emergency Item in the 86th Legislature so that we can pass legislation on this important issue in the first 60 days of the Legislative Session,” Canales reminded the governor. 
The House District 40 state legislator continued: “As I said then, my local teachers — retirees on limited fixed incomes and active employees whose modest salaries are generally stagnant — are now paying hundreds of dollars more a month (sometimes more) for health-care services and essential medications. Retired and active school support employees face an even greater challenge: Their salaries and retirement annuities are significantly less than those of teachers but they must pay the same health-care costs.”
In late May 2017, Canales and his fellow colleagues in the House had offered a $500 million increase to help fund TRS-Care, with that amount coming from the Texas Economic Stabilization Fund, also known as the Texas Rainy Day Fund.
The Texas Rainy Day Fund, which is largely fed by taxes on oil and gas production, has been at the center of debates during previous legislative session over whether to tap it to help stave off budget cuts or increase funding to major state programs, such as public education, the Texas Tribune noted.
However, the Senate had offered $350 million from the state, but wanted local school districts statewide to provide an additional $134 million.
As of the end of November 2018, the Texas Rainy Day Fund swelled to a record high of $12.5 billion, according to the Texas Tribune.
“Every year brings some combination of higher premiums and lower benefits for retired and active school employees so that Texas teachers – having dedicated their lives to public service – increasingly have to choose whether to pay their mortgage, buy groceries, or pay for potentially life-saving medications,” Canales stated in his letter to Abbott, dated Wednesday, December 12, 2018. “We must ask: If we don’t support our teachers, what does that say about the Legislature’s support for our students and the future of public education in Texas?”
The Texas Constitution prohibits the House and Senate from passing legislation during the first 60 days of a regular legislative session unless either chamber suspends the rule by a vote of four-fifths of its membership, or if the legislation is an appropriation or other matter declared by the governor to be an emergency. 
“Your constitutional ability to declare emergency items could allow the legislature to more quickly address this crisis,” Canales further stated in his letter. “I respectfully request that you make our teachers a top priority.”
During the past year, several House and Senate committees have been holding public hearings for the purposes of developing legislation dealing with health insurance and pension issues of crucial importance to public educators in Texas.
Those ideas will help come up with measures to be considered for action by the Texas Legislature during the upcoming 86th regular session.
According to the Texas Retired Teachers Association (TRTA), the Texas Legislature months ago released its interim charges for the Texas Senate and House of Representatives. The charges include issues pertaining to the Teacher Retirement System of Texas (TRS) pension fund and the TRS-Care retiree health insurance program. The charges directed committees to study certain facets relating TRS, and the reports generated by the studies will help inform and guide policymakers in 2019.
TRTA and other key constituents, along with state lawmakers, have focused on advancing an agenda of protecting the defined benefit plan, securing a pension increase for retirees, and advancing new and innovative funding solutions to address the TRS-Care shortfalls.
The issues being studied, from which legislation will be recommended, are:
House Committee on Appropriations 
The House Committee on Appropriations studied the long-term sustainability of the TRS-Care program. The committee also considered options for funding this health care program, especially as it pertains to contributions being based on active employee payroll rather than the cost of health care. The committee also monitored how the bills passed by the Texas Legislature in 2017 relating to TRS-Care are implemented during the interim.
Two bills were passed relating to TRS-Care, H.B. 3976 and H.B. 30, and TRS has already used these bills as the blueprint for how it funds TRS-Care and organizes its participants’ benefits.
House Committee on Pensions 
The House Committee on Pensions is of the utmost importance in determining the future health and funding for the TRS pension fund. The committee was charged with reviewing the state’s oversight of pension systems. Additionally, the committee is responsible for making recommendations to enhance the state’s oversight of local pension systems. The committee evaluated the investment oversight of a number of state-run retirement systems, including TRS. It will identify the best practices made by the agency and make recommendations to strengthen the state’s oversight of the system. The health incentive programs within the group benefit programs at TRS were to be reviewed and evaluated by the committee as well. The committee is responsible for making recommendations on how to reduce expenditures through TRS-Care. Similar to the House Committee on Appropriations, the Pensions Committee will review the implementation of bills passed relating to TRS.
House Public Education Committee 
The House Public Education Committee has reviewed the charter school system in Texas. It will consider the differences in charter and district contributions to TRS on behalf of their employees and make appropriate recommendations to support the retirement benefits of all public school teachers.
Senate Finance 
The Senate Finance committee monitored health care costs throughout the state agencies, including TRS. The committee is attempting to improve and reduce health costs within TRS-Care.
Senate Health and Human Services 
The Senate Health and Human Services Committee has been comparing alternative payment models with providers in Medicare managed care, which includes TRS. The goal of these models is to identify ways in which TRS and the Employee Retirement System (ERS) can work together.
Senate State Affairs 
The Senate State Affairs Committee examined and assessed the TRS pension fund. It has been reviewing the different types of retirement plans, the actuarial assumptions used by TRS, TRS’s investment practices and performance and the adequacy of financial disclosures. The committee will make recommendations to ensure public pension system retirees’ benefits are preserved and protected. The committee is also charged with monitoring the implementation of legislative action on TRS from the past session.
Specifically, the Senate will monitor the following: the implementation of House Bill 3976, relating to the administration of and benefits payable under the Texas Public School Retired Employees Group Benefits Act.

The Government Pension Offset
On its website, the Texas Retired Teachers Association provides key legislation information that affect retired teachers and active teachers and their dependents.
One of the matters that impact these three important constituencies is know as the “government pension offset”. 
TRTA’s perspectives on its leadership’s concerns regarding the government pension offset follow:
Social Security issues are complicated and jargon-filled ventures seemingly designed to confuse the average retiree. However, Social Security provisions can have an enormous, negative impact on your retirement, and most people who fall victim to these issues are unaware of the consequences until it’s too late. So even though terms like “non-SS-covered employment” may make you want to pull your hair out, they are certainly worth learning about.
A prominent issue that Texas retired teachers face is the Government Pension Offset.
The Government Pension Offset, or GPO, is a Social Security provision that reduces government employees’ spousal or survivor benefits. These benefits are commonly related to a spouse receiving their partner’s Social Security income when their partner passes away.
Specifically, the GPO most often applies to the benefits retired Texas teachers can expect to receive as a widow or widower.
The GPO reduces the SS income of survivors by two-thirds the amount of their TRS annuity. In most cases, this completely eliminates the spousal Social Security benefit you can expect as a widow or widower.
Here’s how the math works:
Jane is a retired Texas teacher. She paid into the Teacher Retirement System of Texas for 30 years, and she receives an $1,800 per month annuity. Her husband, Jim, worked in the public sector, and he paid into Social Security for his entire adult life. Jim receives $1,300 per month from Social Security.
Now normally Jane could expect to receive that $1,300 in the case that Jim passes away. However since Jane paid into a government pension without contributing to Social Security, she is subject to the GPO.
Here’s where the formula comes in: the Social Security Administration will reduce Jane’s survivor income by two-thirds the amount of her annuity. Two-thirds of $1,800 is $1,200. If you subtract that $1,200 penalty from $1,300, you get Jane’s GPO-based survivor income of only $100.
Now if that sounds like a drastic reduction in retirement income, that’s because it is. Congress designed the GPO to eliminate spouses from receiving double Social Security income. However, the formula that was installed is completely arbitrary. The benefit reduction is two-thirds regardless if you receive $5,000 per month from your annuity or if you receive $1,000 per month.
With the exception of military spouses, all this formula does is check to see if you fall into the category of having paid into a government pension without having paid into Social Security.
Ninety-five percent of Texas school districts do not pay into Social Security. Overwhelmingly, the GPO affects Texas career teachers.
Now if you’re still working, you do have the potential to avoid the GPO. If your final five years of work history before retirement show you have paid into Social Security, it may be possible to escape the GPO.
If you’re already retired and are feeling the effects of the GPO, you need to join our fight.
TRTA is dedicated to reforming the GPO and helping our members receive the benefits they are owed.
Rep. Terry Canales, D-Edinburg, represents House District 40 in Hidalgo County, which includes portions or all of Edinburg, Elsa, Faysville, La Blanca, Linn, Lópezville, McAllen, Pharr and Weslaco. He may be reached at his House District Office in Edinburg at (956) 383-0860 or at the Capitol at (512) 463-0426.


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