Tuesday, February 20, 2007

No COLA for Texas Teachers

A 3% raise doesn't sound like much, especially when electricity and gasoline prices seem to have soared by double digits in recent months. Still, Social Security's Cost of Living Adjustment (COLA) of 3.3% for 2007 at least partially offsets these rising costs for seniors, even if most of the raise is subsumed by higher Medicare premiums.

Retired Texas teachers are not so lucky.

The Teacher Retirement System of Texas has no COLA provision. Instead, retired teachers must lobby--that is, beg--their legislators each biennium for any increase in their benefits. The last time they were successful was 2001. Since then, inflation has eroded their purchasing power by more than 15%.

Senator Eddie Lucio, D-Brownsville, has filed Senate Bill 492 to give retired teachers a one-time 5% raise. While Senator Lucio is to be lauded for his efforts, such stop-gap measures do not solve the underlying problem, the lack of an automatic COLA provision.

As currently funded, however, the Teacher Retirement System could not afford COLA increases. Here's why: Until the 1996-97 biennium, the state contribution rate to TRS was 7.31%, while teachers paid in 6.4%. A budget crunch that year prompted the legislature to lower the state's contribution to 6%, the minimum allowed by the Texas Constitution. Legislators promised that the reduction would be temporary, but 10 years later, it is still in place. As a result, TRS has lost billions in funding.

Despite the possibility of budget surpluses this biennium, the legislature is unlikely to restore state funding of TRS to 7.31%. State Affairs Chairman Robert Duncan, R-Lubbock, agrees that the state should increase its funding, perhaps matching teachers' contributions of 6.4%, but he has suggested that this increase may come from requiring school districts to contribute to TRS, as well.

Senator Duncan is thus advocating a familiar course of action for our Republican-run legislature: Claim to be holding the line against raising taxes, while pushing responsibility for funding education to the local level. Taxes must still be raised to meet the unfunded mandate, but Senator Duncan and his colleagues get political cover.

In the meantime, Texas' retired teachers must try to survive on their steadily eroding pensions. Let them eat cake, anyone?

1 comment:

Bradley Bowen said...

I'm glad Eddie Lucio is seeking to do something about it, even if it seems that he's taking the wrong approach. You're right... something has got to change here!