Squeezing a balloon
Wed March 2, 2011 4:53 pm

A giant billboard on MLK Blvd in Austin on the periphery of the University of Texas campus essentially offers students a job:  ”Want to teach?  When can you start?”  Apparently the organization paying for the message hasn’t heard about the drama unfolding a few blocks away at the State Capitol, where school superintendents have been warning that state budget cuts could force tens of thousands of teacher layoffs.

Wednesday, bleary-eyed Senate budget writers got another dose of bad news: the cuts they are considering to education could force the Teacher Retirement System’s healthcare plan, TRS-Care, into insolvency by the second year of the next biennium. With higher than average layoffs expected, TRS is expecting “a huge hit on the retiree health care fund,” said TRS executive director Ronnie Jung.

If state funding cuts force schools to trim payroll by 5 percent (a conservative figure), TRS will have to absorb health care costs now paid by school districts for at least 10,000 additional retirees. (Jung says he wouldn’t be surprised if the real figure is 15,000 or 20,000.) And the introduced version of SB 1 funds only a half a percent state contribution to TRS-care, down from one percent.

“That would really wipe everything out,” Jung said. “We would run out of money in the second year of the biennium.”

Senators asked for options. Should the districts be asked to pay more to the fund for off-loading the responsibility to the state? Sen. Bob Deuell wondered: “Is this an unfunded mandate to the state?” Jung diplomatically remarked that it would be hard to impose more costs on school districts in the midst of lay-offs.

Anxiety levels among Texas teachers are already high, Jung said. “Our phones are bombarded” because of news stories about impending teacher layoffs across the state. But if the Legislature could continue the 1 percent contribution to TRS-Care – at a cost of $267 million –  ”that would get us through the biennium,” Jung said.  He also made a pitch for increasing the state’s contribution to the pension trust fund to the tune of $336 million per biennium.

A lobbyist today described the budget hearing process of watching lawmakers squeezing a balloon: pinching here only causes costs to explode somewhere else. The metaphor certainly fits for retired teachers’ health care costs.

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