The struggle over the Texas budget is about priorities. As a conservative, I believe the Lone Star State should do a very few things, and do them right. Education is a high priority, and that includes our active and retired teachers. My mother will become a retired teacher in just a couple of months, and I understand what retirement funds mean to her, as well as the new teacher who expects a secure retirement in the future.
The Texas Teacher Retirement System Pension Fund is in danger. We can’t sugarcoat the facts. Although there is no short-term risk that the fund will run out of money, the system has a $24.1 billion unfunded liability in less than 31 years. That is a big hole we must begin filling soon. The answer is small improvements in the fund now, which can be invested and grow over time.
Recently when the House of Representatives considered the budget, I offered an amendment to redirect over $20 million from non-essential programs to the TRS Pension Fund. Although unsuccessful, my amendment would have frozen the Historical Commission at its current funding level (rather than double it) and defunded direct subsidies to production of films such as “Bad Kids Go to Hell” and video games like “Dungeon Crawler.” Invested at the fund’s historical 8% return over 30 years that money would have become over $500 million to pay retired teachers.
My small effort was motivated by bigger principles: increase TRS funding and streamline government. I was also glad to support a separate amendment to prevent money in the TRS health care account from being swept into the general fund and to preserve it for future needs. Additionally, the overall budget included a small increase in the State’s contribution percentage to the TRS Pension Fund.
As the Legislature considers different solutions to the retirement fund problem, we keep in mind our constitutional obligation to maintain the public schools. Teacher compensation is vital to education. I believe we should preserve the defined benefit retirement plan, but only if we put new money into the system, modify benefits, or a little of both. The system must be financially sound.
Pushing reform back one legislative session may be too much. Growth in sales tax revenue is slowing and there are signs of economic weakness ahead. With health care expenses increasing rapidly and statewide water and road funding shortages, we may find ourselves with much less flexibility in 2015.
Voters, local school districts, and teachers themselves will all have to be part of the solution. And remember education spending must always be viewed against our state constitutional mandates of limited spending increases and a balanced budget. From the State budget perspective, my first inclination is to reduce non-essential spending so we can fund more important priorities. Any solution will require us to have the courage to make difficult decisions. Our commitment to teachers depends on it.
Yours in Liberty,
Matt Schaefer
