LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 76th Regular Session March 31, 1999 TO: Honorable Florence Shapiro, Chair, Senate Committee on State Affairs FROM: John Keel, Director, Legislative Budget Board IN RE: SB761 by Duncan (Relating to member contributions to the Judicial Retirement System of Texas Plan One or the Judicial Retirement System of Texas Plan Two.), As Introduced ************************************************************************** * Estimated Two-year Net Impact to General Revenue Related Funds for * * SB761, As Introduced: negative impact of $(315,000) 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. * ************************************************************************** General Revenue-Related Funds, Five-Year Impact: **************************************************** * Fiscal Year Probable Net Positive/(Negative) * * Impact to General Revenue Related * * Funds * * 2000 $(165,000) * * 2001 (150,000) * * 2002 (277,000) * * 2003 (262,000) * * 2004 (327,000) * **************************************************** All Funds, Five-Year Impact: ***************************************************** * Fiscal Year Probable Revenue Gain/(Loss) from * * General Revenue Fund * * 0001 * * 2000 $(165,000) * * 2001 (150,000) * * 2002 (277,000) * * 2003 (262,000) * * 2004 (327,000) * ***************************************************** Fiscal Analysis The bill would allow members of the Judicial Retirement System Plan I (JRS-1) and the Judicial Retirement System Plan Two (JRS-2) with 20 or more years of service to cease making member contributions. Under current statute, all active members of JRS-1 and JRS-2 contribute 6.0% of salary. Methodology Member contributions by active JRS-1 members are deposited into the General Revenue Fund. This revenue would be reduced from current expected levels, which range from $803,000 in FY2000 to $526,000 in FY2004. The revenue decrease would equal the amount members with 20 years or more of service would have contributed at 6.0% of their salary. This decrease is estimated by the JRS actuary to range from $165,000 in FY2000 to $327,000 in FY2004. The elimination of member contributions for JRS-2 members with 20 or more years of service would not have a fiscal impact to the state but would result in a decrease in contributions available to amortize the fund's unfunded actuarial accrued liability. As a result, the funding period would increase from the current 6.7 years to 25.2 years. Local Government Impact No fiscal implication to units of local government is anticipated. Source Agencies: LBB Staff: JK, SD, SC