Retired public employees discovered yesterday that they would not receive additional $500 checks this year. According to Senator Robert Duncan, R-Lubbock, they shouldn’t hold their breath for more benefits next cycle either. “I don’t think we’ll be able to,” he said. “The constitution restricts … any sort of benefit enhancement unless the fund is actuarially sound. It’s not.”
The controversy hinges on the wording of the appropriations bill passed in the 2009 session. The legislature set aside $155 million for the additional checks, but rather than distributing the money through state pension funds, the bill put the Comptroller in charge of distribution.
The payments would only be made if the Attorney General had a “conclusive opinion that such one-time payments are constitutionally and statutorily permissible," according the bill’s language — yet the attorney general's opinion said that there was no way to have a definitive position.
"The appropriation provision on its very face makes it impossible for us to conclusively opine that such payments 'are constitutionally and statutorily permissible,'" the opinion read.
Since the appropriated millions will return to the pension fund, Duncan says the attorney general’s decision will further the fund’s stability. The new money raised the state’s contribution rate to from 6.58 to 6.64 percent. Duncan said he is committed to keeping the fund healthy in the long term, even if that means no additional money for state retirees in the next few sessions.
“The popular thing to do is, ‘Give me something today,’” Duncan said of the payments. “But if that’s what we continue to do, these funds will always be short. They will always be actuarially unsound.”
Advocacy groups that lobbied for the additional checks say that in a recession, teachers and other public employees needed the money badly and view the process with the Attorney General’s Office as an underhanded tactic.
“We did not expect there to be such a discussion of semantics,” said Tim Lee, the president of Texas Retired Teachers Association.
Lee said while the TRTA knew about the decision to go to the attorney general’s office, he did not know the focus would be on the complexities of the word “conclusively.” Duncan, however, said he told groups like TRTA that the language set a high hurdle, and all parties involved agreed to the language knowing the risks.
That’s cold comfort to groups like the American Federation of Teachers, whose Texas affiliate put out press releases blaming Duncan for the Attorney General’s decision. The AFT thinks Duncan knew that the wording would kill the effort.
“If he and other lawmakers really wanted to draft something that did meet constitutional muster, they could have done so,” said Rob D'Amico, the affiliate's communications director.
With no plan for increasing payments in the future, Lee said TRTA will now push Duncan and other legislators who focused on the fund’s stability to safeguard state contributions and find ways increase benefits over time. But to hear Duncan tell it, those increases may be a long time coming.
“Good policy wins with this opinion,“ he said. “The benefits are small relatively, but, I mean, that’s what a defined benefit is.”