Texas’ Public Servants — and Its Taxpayers — Need a Healthy Retirement System
By Quint Balkcom and Richard Jankovsky
People from every community in the state come to work for the great State of Texas.
They spend decades maintaining and patrolling Texas' roadways and waterways, preserving the peace, overseeing natural areas and resources, and serving the disadvantaged.
Public health workers who worked long shifts in response to COVID-19 are state employees. So are the park employees who maintain natural spaces for Texans.
And so are our fellow game wardens and Department of Public Safety troopers.
These are some of Texas’ most essential workers. They played a vital role helping the state weather the pandemic. Many have traded higher private-sector salaries for careers in public service. The state’s promise of meaningful retirement benefits encourages and rewards this commitment.
Now, shaky finances have put this promise in jeopardy. For decades, the state has failed to adequately fund its Employees Retirement System (ERS). The pension fund’s uncertain future now represents a looming crisis for taxpayers and employees.
Unless something changes, the fund could be completely depleted in 40 years, and it will only get more expensive to prevent this catastrophe. Already, it has been 20 years since state retirees had a cost-of-living annuity adjustment.
It took years to create this problem, and it will take years to solve it. The Texas Legislature can and should take action this year by making a requested investment of roughly $950 million into the fund and committing to a long-term path that will bring ERS into balance in a way that meets retirees’ needs. That includes remaining faithful to the system’s traditional and historic structure, which safeguards the interests of young employees even as it protects the livelihoods of retired ones.
The fund’s unsoundness is not just a problem for state employees and legislative budget-writers. It endangers things Texans love and need, from beloved state parks to protection by DPS troopers and Texas game wardens, when the state fails to adequately fund ERS. It’s harder to recruit good employees — and harder to keep them — when people cannot be sure of the state’s commitment to its pension system. And that undermines the value and effectiveness of essential state services.
Texas taxpayers will ultimately have to cover the fund’s liability. The failure to address this problem today means it will be even more expensive for taxpayers to fix in future years. Plus, unfunded pension funds can wreak havoc on the state’s bond rating, which increases the cost of borrowing and makes it more expensive simply to operate state government every day.
State employees are doing more than their part. Newly hired employees contribute more and more of their paychecks each year to the retirement system. In 2014, the rate went from 6.5 to 6.6 percent; in 2015, to 6.9 percent; and in 2016, to 9.5 percent — 10 percent for law enforcement officers.
Meanwhile, the state has not kept up even with its national peers. In comparable retirement plans in other states, the average state contribution is 14.7 percent; with Texas, it’s just 10 percent. The average employee contribution in other states is 6.25 percent; Texas state employees pay nearly four percentage points more.
Most state employees will tell you their work has meaning for them. They know their pay is less than comparable workers in the private sector. They accept reduced take-home pay today, in part, to finance their membership in a stable retirement pension plan. Undermining that plan weakens one of the state’s best tools for attracting and keeping good people.
When the state’s promise to its workers is in jeopardy, it’s a big problem — not just for state employees, but for all Texans. Texas should address it by putting ERS on a path toward long-term health and stability.
Lieutenant Richard Jankovsky is president of the Department of Public Safety Officers Association. Major Quint Balkcom is president of the Texas Game Warden Peace Officers Association.