Honorable Joan Huffman, Chair, Senate Committee on Finance
FROM:
Jerry McGinty, Director, Legislative Budget Board
IN RE:
SB1737 by Huffman (Relating to service retirement benefits payable by the Employees Retirement System of Texas to certain law enforcement officers and custodial officers.), As Introduced
Estimated Two-year Net Impact to General Revenue Related Funds for SB1737, As Introduced: a negative impact of ($40,236,264) 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.
General Revenue-Related Funds, Five- Year Impact:
Fiscal Year
Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2026
($38,368,132)
2027
($1,868,132)
2028
($1,868,132)
2029
($1,868,132)
2030
($1,868,132)
All Funds, Five-Year Impact:
Fiscal Year
Probable Savings/(Cost) from General Revenue Fund 1
Probable Savings/(Cost) from GR Dedicated Accounts 994
Probable Savings/(Cost) from Federal Funds 555
2026
($38,368,132)
($38,360)
($11,508)
2027
($1,868,132)
($38,360)
($11,508)
2028
($1,868,132)
($38,360)
($11,508)
2029
($1,868,132)
($38,360)
($11,508)
2030
($1,868,132)
($38,360)
($11,508)
Fiscal Analysis
The bill would amend the Government Code to make certain members of the Texas Juvenile Justice Department (TJJD), Comptroller of Public Accounts (CPA), and Office of the Attorney General (OAG) eligible to receive benefits in the Law Enforcement and Custodial Officer Supplemental Retirement Fund (LECOS).
Under the provisions of the bill, the additional members added to LECOS from TJJD, the CPA, and the OAG hired before September 1, 2022 (Groups 1-3), and employed on December 1, 2024, would have previous service credit established in LECOS if the Employees Retirement System of Texas (ERS) was appropriated the funds required to cover the previous service credit. For those hired on or after September 1, 2022 (Group 4), LECOS service credit would be earned beginning September 1, 2025.
Methodology
According to ERS, the bill would impact approximately 1,661 juvenile justice officers and peace officers, as shown in the table below.
TJJD
CPA
OAG
Total
Groups
1-3
632
31
164
827
Group
4
793
<10
33
834
Total
1,425
39
197
1,661
According to the agency, the bill would increase the unfunded liabilities and the normal cost of the ERS plan, resulting in a one-time lump cost of $26,400,000 in General Revenue funds. The bill would also increase the unfunded liabilities of the LECOS plan, resulting in a one-time lump sum cost of $10,100,000 in General Revenue funds. In each year, state contribution costs to LECOS would increase by $1.9 million in General Revenue funds, $38,360 in General Revenue-Dedicated funds, and $11,508 in federal funds to cover the employer contribution rate of 1.75 percent of payroll.
Local Government Impact
No fiscal implication to units of local government is anticipated.