Honorable Stan Lambert, Chair, House Committee on Pensions, Investments & Financial Services
FROM:
Jerry McGinty, Director, Legislative Budget Board
IN RE:
HB3221 by Tepper (Relating to certain employer contributions to the Teacher Retirement System of Texas.), As Introduced
Estimated Two-year Net Impact to General Revenue Related Funds for HB3221, As Introduced: an impact of $0 through the biennium ending August 31, 2027.
The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.
The fiscal implication of limitations on employer contributions for certain districts of innovation could not be determined due to lack of data.
General Revenue-Related Funds, Five- Year Impact:
Fiscal Year
Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2026
$0
2027
$0
2028
$0
2029
$0
2030
$0
All Funds, Five-Year Impact:
Fiscal Year
Probable Revenue Gain/(Loss) from TRS Trust Account Fund 960
2026
($13,500,000)
2027
($13,500,000)
2028
($13,500,000)
2029
($13,500,000)
2030
($13,500,000)
Fiscal Analysis
The bill would limit employer contributions for charter schools and districts of innovation (DOIs) that opt out of the minimum salary schedule (MSS), so that the employer would only contribute 2.0 percent of payroll up to the MSS. Under current law, these employers also contribute 2.0 percent of payroll above the MSS.
Methodology
The Teacher Retirement System (TRS) estimates that the loss of funding that would occur from the change to charter school contributions would be $13.5 million annually. TRS did not have necessary data on applicable DOIs to calculate the loss of contributions resulting from employer contribution limitations for MSS-exempt DOIs, so the impact could not be determined.
Local Government Impact
The bill could result in savings for certain public schools that would see a reduction in employer benefit contributions.