Props 9 and 10 For two more proposed constitutional amendments: a statement, background, and short analysis.
SJR 2 “The constitutional amendment authorizing the 88th Legislature to provide a cost-of-living adjustment to certain annuitants of the Teacher Retirement System of Texas.”
This amendment authorizes the legislature to provide a cost-of living adjustment to eligible annuitants of the Teacher Retirement System of Texas (TRS). The proposed amendment also would authorize the legislature to appropriate money from the general revenue fund to the Texas Comptroller of Public Accounts to pay the cost-ofliving adjustment.
According to Dallas Rep. John Bryant (D), only Texas and Louisiana have teacher retirement systems that do not offer cost of living adjustments and also do not let teachers participate in the federal Social Security system, which does provide annual inflation bumps. Thus, most Texas retired teachers are not eligible to receive Social Security; therefore, a TRS pension is their primary source of income. However, the TRS has not given a cost of living adjustment (COLA) since Sept., 2004. Since 2004, Social Security has made COLA increases to beneficiaries in 15 of the 18 years—9 being 2% or larger, with 4 larger than 4%. The implementing legislation for this amendment, SB 10, gives one-time COLAs of 6%, 4%, or 2%, depending on the retirement date of the teacher. It appears future COLAs will depend on future legislatures. Retired teachers need this COLA. Teachers deserve more, but this is a positive step.
Prop 10
SJR87 “Theconstitutional amendment to authorize the legislature to exempt from ad valorem taxation equipment or inventory held by a manufacturer of medical or biomedical products to protect the Texas healthcare network and strengthen our medical supply chain.”
“Equipment or inventory” means tangible personal property held by a medical or biomedical manufacturer as a finished good, or property used in the manufacturing or processing of medical or biomedical products.SB2289,dependent on this amendment, puts the exemptions into law.
The Greater Houston Partnership has a good statement of the importance to Texas manufacturers and medical facilities: “Equipment and inventory taxes drive up the effective tax rate for Texas medical and biomedical manufacturers, negatively impacting manufacturers and making it more difficult to grow the industry. The state’s competitors - North Carolina, Massachusetts, Tennessee, Pennsylvania, and Illinois - all have an effective tax rate of less than 13.5%, compared to Texas’ rate of over 28%. The bottom line: Reducing the tax burden on the medical and biomedical industries in Texas will help onshore manufacturing, create jobs, drive economic resiliency, and promote innovation in the state.” https://www.houston.org/ news/hou-atx-legislativeupdate- week-13 The downside of this amendment comes from the dependence of local government on property tax. This applies to other entities with tax power as well, like community colleges, municipal utility districts, and school districts. We’re chipping away at the support for other services we rely on in a direct way. The proposed amendment does not identify or suggest compensation to local governments; neither does the enabling legislation. The Legislative Budget Board fiscal note for SB 2289 states that School districts will lose about $43 M in 2025 growing to $60 M in 2028. There will be a loss of similar magnitude to the Foundation School Program, because that program makes up for School district losses.