Supplemental Budget Bill Addresses Health Care for Retired Teachers

The Texas Senate voted unanimously Tuesday to pass a bill that plugs holes in the 2014-15 budget and shores up the health care plan for retired teachers.

With little debate, the Senate passed House Bill 2, a supplemental budget bill that addresses needs in the current budget, which ends Aug. 31. Lawmakers routinely pass a supplemental budget bill each session. The final changes to HB 2 were worked out as part of a larger budget deal between members from both chambers in recent weeks.

The price tag of this year’s supplemental budget is $564.6 million, with $300 million coming from state funds and the rest from federal funds. But the bill actually addresses well over $1 billion in state needs by shifting millions of dollars in unspent funds from other areas of the budget.

The bill's biggest expenditure is $768 million to fund TRS-Care, the health care plan for the Teacher Retirement System of Texas. The fund is on track to run out of money during the 2016 fiscal year. The fund's financial troubles largely stem from soaring health care costs and lawmakers’ piecemeal approach to funding the system in the past.

Before 1986, Texas had no health insurance program for retired teachers. When lawmakers created the program, they expected its initial funding would last until 1995 — long enough to design a more sustainable model, the retirement system says. But lawmakers never did that, leaving the agency to occasionally request more state funding to keep the program solvent. 

HB 2 also includes $75.5 million to cover Medicaid bills through the end of the fiscal year and $40.4 million in funding for border security costs, most of which will go to the Department of Public Safety.

“This is the legislation that will help our retired teachers,” Finance Chairwoman Jane Nelson, R-Flower Mound, told fellow senators ahead of Tuesday's vote. “It will help keep our promises to our most vulnerable citizens. It will fund operations that will help secure our border, and it accounts for all of the savings we have realized over the biennium.”

The bill heads back to the House where its author, House Appropriations Chairman John Otto, R-Dayton, is expected to concur with changes made in the Senate and send the legislation to the governor.

This session’s supplemental budget bill grew from an earlier House estimate of $433 million but is still far smaller than the $5.4 billion one approved in 2013, which included $2 billion for the state water plan as part of a broader budget deal.

Reporter Edgar Walters contributed to this story.