LEGISLATIVE BUDGET BOARD

Austin, Texas

FISCAL NOTE, 79TH LEGISLATIVE REGULAR SESSION

April 13, 2005

TO:	Honorable Craig Eiland, Chair, House Committee on Pensions & Investments
FROM:	John S. O'Brien, Deputy Director, Legislative Budget Board
IN RE:	HB346 by Escobar (Relating to the amounts to be appropriated for the state contribution to the teacher retirement program for fiscal years 2006 and 2007.), As Introduced

Estimated Two-year Net Impact to General Revenue Related Funds for HB346, As Introduced: a negative impact of ($3,445,931,899) through the biennium ending August 31, 2007.

Appropriations:

Fiscal Year	Appropriation out of GENERAL REVENUE FUND 1	Appropriation out of EST OTH EDUC & GEN INCO 770
2006	$1,575,054,037	$85,269,975
2007	$1,870,877,862	$106,772,838

General Revenue-Related Funds, Two-Year Impact:

Fiscal Year	Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2006	($1,575,054,037)
2007	($1,870,877,862)

General Revenue-Related Funds, Five-Year Impact:

Fiscal Year	Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2006	($1,575,054,037)
2007	($1,870,877,862)
2008	$0
2009	$0
2010	$0

All Funds, Five-Year Impact:

Fiscal Year	Probable Savings/(Cost) from GENERAL REVENUE FUND 1	Probable Savings/(Cost) from EST OTH EDUC & GEN INCO 770	Probable Revenue Gain/(Loss) from TRS TRUST ACCOUNT FUND 960
2006	($1,575,054,037)	($85,269,975)	$1,660,324,012
2007	($1,870,877,862)	($106,772,838)	$1,977,650,700
2008	$0	$0	$0
2009	$0	$0	$0
2010	$0	$0	$0

Fiscal Analysis

The bill would appropriate $1.6 billion in fiscal year 2006 and $1.9 billion in fiscal year 2007 to the Teacher Retirement System (TRS) for the purpose of making contributions to the TRS pension fund on behalf of public education and higher education employees.

Methodology

The bill would increase the state contribution to the TRS pension fund by $1.6 billion in fiscal year 2006 and $1.9 billion in fiscal year 2007.  The bill does not specify a state contribution rate, makes no changes to the member contribution rate, and makes no changes to the pension benefit structure.  Analysis by the TRS actuary indicates that the provisions of the bill would have no impact on the normal cost or the Unfunded Actuarial Accrued Liability of the pension fund.

Local Government Impact

No fiscal implication to units of local government is anticipated.

Source Agencies:

323 Teacher Retirement System

LBB Staff:

JOB, SR, UP, JSc