LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 76th Regular Session
March 23, 1999
TO: Honorable Elliott Naishtat, Chair, House Committee on
Human Services
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB2877 by Maxey (Relating to the lease of certain
facilities and the retirement options and health coverage
of certain employees in connection with implementation
of integrated enrollment services for health and human
services programs.), As Introduced
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB2877, As Introduced: positive impact of $626,003 through the *
* biennium ending August 31, 2001. *
* *
* The bill would make no appropriation but could provide the legal *
* basis for an appropriation of funds to implement the provisions of *
* the bill. *
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The bill would provide authority for health and human services agencies
to co-locate with private service providers in leased or subleased space
and to share business resources under certain circumstances. The bill
would affect state employees whose positions with the Texas Workforce
Commission, Department of Health, Department of Human Services or
Department of Mental Health and Mental Retardation are eliminated before
September 1, 2003 by contracts with the private sector service providers
or other reductions in services of those agencies.
State employees who separate from state service at that time would be
offered a temporary retirement option. Such employees who would be
eligible for service retirement with an additional three years of age and
three years of service are eligible to retire immediately when their
positions are eliminated with an additional three years of service
credit.
Employees not eligible for this first option who would be eligible for
service retirement with an additional five years of age and five years
of service are eligible to retire with no additional service credit at
the point that they would have been eligible if they had continued in
state employment. The Department of Health and Department of Human
Services employees who receive a cash payment (and two months of health
coverage after separation from the state) under an incentive program
would not be eligible for this retirement option.
General Revenue-Related Funds, Five-Year Impact:
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* Fiscal Year Probable Net Positive/(Negative) *
* Impact to General Revenue Related *
* Funds *
* 2000 $305,367 *
* 2001 320,636 *
* 2002 (1,007,462) *
* 2003 (484,966) *
* 2004 (18,904) *
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All Funds, Five-Year Impact:
***********************************************************************
*Fiscal Probable Probable Probable Probable Change in *
* Year (Cost) from (Cost) from Savings Savings Number of *
* General Federal from from State *
* Revenue Funds General Federal Employees *
* Fund 0555 Revenue Funds from FY 1999 *
* 0001 Fund 0555 *
* 0001 *
* 2000 $0 $0 $305,367 $404,789 (243.0) *
* 2001 0 0 320,636 425,028 (243.0) *
* 2002 (1,344,129) (1,781,753) 336,667 446,280 (1,125.0) *
* 2003 (838,467) (1,111,456) 353,501 468,594 (1,671.0) *
* 2004 (390,080) (517,083) 371,176 492,023 (1,923.0) *
***********************************************************************
Fiscal Analysis
It is assumed that the provisions of the bill would apply to the Texas
Integrated Enrollment and Services (TIES) project. The Health and Human
Services Commission (HHSC) reports that most employees affected by the
provisions of the bill are currently employed as eligibility workers by
the Department of Human Services. In HHSC's estimation, there would be
approximately 2,400 full-time equivalent positions reduced with the
implementation of a TIES re-engineered business process.
Methodology
Based on estimates coordinated by HHSC, it is assumed that twenty percent
of the identified FTEs would find state employment elsewhere, ten
percent would select the early retirement option, and the remaining FTEs
would opt for a bonus with two months of health coverage. Based upon
Employees Retirement System (ERS) information, it is estimated that 243
employees will be eligible (and take advantage of ) for the enhanced
benefits based on three years added to age and service. Their estimates
assume that all members eligible to retire with three years added to age
and service would do so in fiscal year 2000.
HHSC estimates assume that FTE reductions would begin in fiscal year 2002
and continue through fiscal year 2004. HHSC also assumes that
"re-engineered business processes" will be implemented which would close
a number of local offices and institute call centers as the main entry
point to eligibility for a number of health and human services programs.
HHSC's estimates assume costs of an average bonus of $3,000 and two
months of health coverage. They also assume that incentives would not be
provided until after individuals complete their required amount of
service with their respective state agency.
It is assumed in the method of financing that the federal partners will
share costs and savings in current proportions.
Local Government Impact
No significant fiscal implication to units of local government is
anticipated.
Source Agencies: 303 General Services Commission, 324 Department
of Human Services, 327 Employees Retirement System
LBB Staff: JK, TP, AZ