OP-ED: For state employees and retirees, the journey of a thousand miles begins with a Texas-sized one leap
There’s a Chinese proverb that says, “the journey of a thousand miles begins with a single step,” attributed to ancient philosopher Lao Tzu. Halfway around the world and over a millennia later, the good folks in the 87th session of the Texas Legislature are pulling on their boots and taking a big leap in the right direction towards a plan that protects our state employees and all taxpayers from certain peril.
This week, the Senate will consider CSSB 321 by Sen. Joan Huffman, R-Houston, which creates a cash balance retirement plan for incoming state employees effective September 1, 2022—not affecting current state employees. If you are wondering why state pension reform is necessary, it’s because the Employees Retirement System of Texas (ERS) pension fund is not sound. The fund will run out of money in 2061 and is approximately $15 billion in debt. Unless the ERS pension debt is addressed, it will continue to grow by $1.5 billion every two years. Sit on that for a minute.
If you, your children, or grandchildren live in Texas—they stand to pay more in taxes if our legislature doesn’t take action now to address the pension debt. Otherwise, Texas will have no choice but to fund employee benefits with money from the general revenue fund. By then, it will cost at least four times as much. Every taxpayer would pay more.
At our state capitol, ERS has requested money to address the pension debt, or, in the alternative, approve a plan to pay off the debt. The Senate wisely said it would not provide the funding necessary to pay off the debt or create a plan to pay off the debt without pension reform. A cash balance pension plan was chosen as the alternative best suited for future state employees. And that’s a good start. Let me tell you why.
CSSB 321 creates a basis for the Legislature to appropriate money towards the pension debt, which would help pay off the debt in about 70 years. The Texas Public Employees Association continues to work with legislators to reduce the payoff period to save taxpayers and the state money.
Having a retirement fund that does not run out of money matters to over a quarter of a million Texas families—current state employees and retirees. Addressing the pension funding debt matters to all Texas taxpayers.
Have you heard quite enough and you’re ready to make something happen? If the Senate passes CSSB 321, the bill then goes to the House of Representatives for consideration.
Contact your state representative and urge them to support CSSB 321’s plan to start stabilizing the current ERS retirement plans and work toward ensuring that all benefits earned will be paid at the lowest overall costs to taxpayers.
We may have a journey of a thousand miles to make together, but these next few steps can make the remaining ones less arduous for all Texans.
Ann Bishop is the executive director of the Texas Public Employees Association (www.tpea.org) and was the executive director of Employees Retirement System of Texas from 2004 to 2015.
Annie Spilman A shortage of workers to fill open jobs is delaying our economic recovery as Texas continues trying to... read more