Honorable Joan Huffman, Chair, Senate Committee on State Affairs
FROM:
John McGeady, Assistant Director Sarah Keyton, Assistant Director Legislative Budget Board
IN RE:
HB2384 by Leach (relating to judicial compensation and assignment, the contributions to, benefits from, membership in, and administration of the Judicial Retirement System of Texas Plan One and Plan Two, and the compensation and retirement benefits of certain prosecutors and other members of the elected class of the Employees Retirement System of Texas.), Committee Report 2nd House, Substituted
Estimated Two-year Net Impact to General Revenue Related Funds for HB2384, Committee Report 2nd House, Substituted: a negative impact of ($34,501,701) through the biennium ending August 31, 2021.
The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.
Fiscal Year
Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2020
($16,780,304)
2021
($17,721,397)
2022
($17,813,230)
2023
($17,913,230)
2024
($18,013,230)
Fiscal Year
Probable Savings/(Cost) from General Revenue Fund 1
Probable Savings/(Cost) from Federal Funds 555
2020
($16,780,304)
($354,550)
2021
($17,721,397)
($354,550)
2022
($17,813,230)
($354,550)
2023
($17,913,230)
($354,550)
2024
($18,013,230)
($354,550)
Fiscal Analysis
The bill would amend the Family Code and the Government Code to modify the compensation structure of certain judges and professional prosecutors and make adjustments to their retirement systems.
The bill would increase the statutory floor for the state salary for a district court judge from $125,000 to $140,000 and would clarify that this amount would be the state base salary for this position in addition to continuing the current authority for the salary to be set at an amount established in the General Appropriations Act ($140,000 for the 2018-19 biennium) every two years. The bill would also make conforming changes to maintain statutory linkages of those judicial and prosecutor positions that are linked to a district judge's state base salary.
The bill would modify the state compensation of district court judges, appellate court judges, the state prosecuting attorney, and professional prosecutors through the establishment of a tiered, tenure-based structure with the state salary of a judge or prosecutor equal to 110 percent of a district judge's state base salary for four or more years of service and 120 percent of a district judge's state base salary for eight or more years of service.
The bill would require the state to reduce the annual state salary of a professional prosecutor by the excess amount equal to the maximum combined state base salary of a district judge with comparable years of service ($168,000) plus the maximum allowable county supplement for a district judge ($18,000), or $186,000 each year.
The bill would set the benchmark salary used in the formula to calculate the state supplement paid to eligible county prosecutors to be the state annual salary paid to a district judge with comparable years of service.
The bill would set the salary of associate judges employed by the Office of Court Administration (OCA) that hear and dispose of cases in child protection and child support courts to 90 percent of a district judge's salary, or $126,000. The bill would modify the state compensation paid to a presiding judge of an administrative judicial region to be a percentage of the state base salary for a district court judge.
The bill would set the monthly longevity pay for judges or justices who have completed 12 years of services to be the product of 0.05 multiplied by the judge or justices monthly state salary.
The bill would change the calculation of retirement annuities for members of Judicial Retirement System Plan Two (JRS-II) who retire on after the effective date and district attorneys who retire from the Employees Retirement System (ERS) on or after the effective date. The bill would also increase JRS-I and JRS-II member contribution rates from 7.5 to 9.5 percent.
The bill would require the ERS medical board, instead of the Chief Justice of the Supreme Court, to certify disability determinations for the purposes of disability retirement.
The bill would take effect September 1, 2019.
Methodology
State judicial compensation is traditionally met through a mix of General Revenue and Judicial Fund No. 573 funding, however for the past several fiscal years Judicial Fund No. 573 revenues have not been sufficient to meet all judicial salary obligations. Due to this, General Revenue funding has been used to meet the remaining obligations. Therefore, this estimate assumes General Revenue funding would be needed to cover the full state obligations for these provisions.
Under the provisions of the bill, the salary for an associate judge employed by OCA for operation of child protection and child support courts would be equal to 90 percent of the state base salary paid to a district court judge, or $126,000. OCA anticipates operating 25 child protection courts and 43 child support courts for the 2020-21 biennium. Associate judge salaries for these courts range from $110,495 to $111,930. Based on OCA's analysis, the cost to increase the salaries of these associate judges to levels provided in the bill would be $1,066,604 each fiscal year in General Revenue. These costs would be partially offset by $354,550 in federal funds to support the administration of Title IV-D child support cases that is provided to the Office of Court Administration through an Interagency Contract with the Office of Attorney General for a net annual increase of $712,054 in All Funds.
The state salary for a district court judge as established in the General Appropriations Act for the 2018-19 biennium is $140,000. The state salary for a Justice of the 14 Courts of Appeals (14 Courts) is 110 percent of a district judge's state salary, or $154,000, with a Chief Justice of the 14 Courts receiving an additional $2,500 for a state salary of $156,500. The state salary of a Judge or Justice of the Supreme Court of Texas (Supreme Court) or the Court of Criminal Appeals (CCA) is 120 percent of a district judge's state salary, or $168,000, with the Chief Justice of the Supreme Court and the Presiding Judge of the CCA receiving an additional $2,500 for a state salary of $170,500.
Under the provisions of the bill, the tenure-based compensation structure would adjust the state salaries for state judge and prosecutor positions as established in the General Appropriations Act to certain percentages of that state salary depending on the judge or prosecutor's years of service: 110 percent of the state salary for between 4-8 years of service (Tier 1) and 120 percent of the state salary for 8 or more years of service (Tier 2). This structure would result in state salary amounts for each state judge or prosecutor position that are dependent on years of service within each tier as shown in the table below:
Type of Judge
Court
2018-19 GAA
State Base Salary of Supplement
Tier 1
Tier 2
Chief Justice
Supreme Court
$170,500
$170,500
$187,300
$204,100
Presiding Judge
CCA
Justice
Supreme Court
$168,000
$168,000
$184,800
$201,600
Judge
CCA
Chief Justice
14 Courts
$156,500
$156,500
$171,900
$187,300
Justice
14 Courts
$154,000
$154,000
$169,400
$184,800
District Judge
District Court
$140,000
$140,000
$154,000
$168,000
Professional Prosecutors
Judicial Districts
$140,000
$140,000
$154,000
$168,000
District Attorneys
Judicial Districts
$112,000
$112,000
$123,200
$134,400
Under the provisions of the bill, the tenure-based compensation structure would require an additional $475,073 in General Revenue in fiscal year 2020 and $512,873 in fiscal year 2021 ($987,946 for the 2020-21 biennium) for the salaries of the Chief Justice and Justices of the Supreme Court of Texas and the Presiding Judge and Judges of the Court of Criminal Appeals; an additional $1,397,470 in General Revenue in fiscal year 2020 and $1,480,887 in fiscal year 2021 ($2,878,357 for the 2020-21 biennium) for the salaries of the 14 chief justices and 66 justices of the 14 Courts of Appeals Districts; an additional $8,327,293 in General Revenue in fiscal year 2020 and $9,039,427 in fiscal year 2021 ($17,366,720 for the 2020-21 biennium) for salaries of the district judges; an additional $2,238,021 in fiscal year 2020 and $2,714,262 in fiscal year 2021 ($4,952,283 for the 2020-21 biennium) for salaries of the professional prosecutors; and an additional $8,167 in fiscal year 2021 for the State Prosecuting Attorney position. This estimate assumes current years of service and no turnover in the 2020-21 biennium, and factors in the 5.0 percent state judge and justice longevity pay beginning after the completion of 12 years of service.
Under the provisions of the bill, the benchmark salary used to calculate the state supplement paid to eligible county prosecutors would be equal to the state annual salary paid to a district judge with comparable years of service. Each county that has a county prosecutor is entitled to receive from the state supplemental salary compensation in an amount that is one-half of the benchmark salary divided by the number of counties served by the state prosecutor, unless that formula would result in an amount less than one-sixth of the benchmark salary. This compensation structure would require an additional $730,393 in fiscal year 2020 and $753,727 in fiscal year 2021 for a total of $1,484,120 for the 2020-21 biennium. This analysis assumes current years of service and no turnover in the 2020-21 biennium.
Under provisions of the bill, annuities for JRS-II retirees who retire on or after the bill's effective date would be calculated based upon the salary of a similar judge with the same amount of service credit. The costs in the tables above ($5.4 million for 2020-21) include both the immediate contribution cost that results from increased salaries as well as the longer-term cost of increasing liabilities and actuarially sound contribution rates.
This analysis determines that the overall net effect of adjusting salaries and annuities for district attorneys, as well as clarification of the annuity calculation for the elected class, is not significant to the Employees Retirement System. The agency anticipates that any additional work related to disability determinations could be reasonably be absorbed with current resources.
Regarding the calculation of ERS annuities for the elected class, the bill amends statute to align the multiplier to Board Rule, which is effectively an increase from 2 percent to 2.3 percent. If this provision were interpreted as a benefit enhancement, Government Code 811.006 would require that the ERS Fund be actuarially sound, which is estimated to average approximately $287.4 million in All Funds annually in fiscal years 2020 through 2024. These costs are not included in the tables above.
Local Government Impact
According to the Office of Court Administration, The salary for the regional presiding judges is apportioned to the counties that comprise the region. Under current law, the judges of the 1st, 5th, 8th, and 10th administrative judicial regions who are active judges make $33,000; the judges of the 2nd, 3rd, 4th, and 11th administrative judicial regions make $50,000; the judges of the 6th and 7th administrative judicial regions make $40,000; and the judge of the 9th administrative judicial region makes $35,000.
Under the bill, the active judges would make $42,000 (30% of $140,000), an increase per judge of $9,000, or a total of $36,000 ($72,000 for the biennium). The judges of the 2nd, 3rd, 4th, and 11th AJRs would make $63,000 (45% of $140,000), an increase of $13,000 per judge, or $52,000 ($104,000 for the biennium). The judges of the 6th and 7th AJRs would make $49,000 (35% of $140,000), an increase of $9,000 per judge, or $18,000 ($36,000 for the biennium); and the judge of the 9th AJR would make $42,000 (30% of $140,000), an increase of $7,000 ($14,000 for the biennium). The total statewide biennial impact to counties would be $226,000.
Source Agencies:
212 Office of Court Administration, Texas Judicial Council, 304 Comptroller of Public Accounts, 327 Employees Retirement System