Legislative Update

10-3-08 TRS to host teleconference to answer economic concerns

The Teacher Retirement System (TRS) will host a teleconference at 4 p.m. Monday, Oct. 6, to answer educators’ questions regarding the economic crisis and how it will affect TRS. Members will be able to participate in the teleconference or submit questions to be answered during the call.

The teleconference will include opening remarks by TRS Fiduciary Counsel Roel Campos, who will offer perspective on the legislative efforts to alleviate the crisis. A former two-term Securities and Exchange Commission (SEC) commissioner, Campos is one of the country’s leading experts in securities regulation, corporate governance and board fiduciary duties. Campos and TRS Executive Director Ronnie Jung will discuss the government’s plans and what implications they might have for TRS.

To participate in the teleconference live, call toll free (877) 757-0918 and enter pass code

446725. You can submit your questions prior to the call by e-mailing them to chalktalk@trs.state.tx.us. You can also hear a recorded replay of the call once it has concluded by calling (888) 348-4629 and entering pass code 446725. The replay will only be available for five days after the call, but a permanent recording will be posted on the TRS Web site within a week.

ATPE encourages all members to take advantage of this unique opportunity to have your concerns directly addressed by TRS officials.

10-3-08 Voter registration deadline Monday, Oct. 6

Register to vote before it’s too late!

The 2008 elections are just a few weeks away, and it is imperative that educators turn out and support the candidates they believe will best support public education. To vote in the election, you must be registered to vote by Monday, Oct. 6. If you register by mail, your registration card must be postmarked by that date. If you were previously registered, you do not have to reregister unless you have moved or your name has changed.

To find out if you need to register, go to https://voterinfo.sos.state.tx.us/voterws/viw/faces/SearchSelectionVoter.jsp.   

You can download a mail-in registration card at http://www.sos.state.tx.us/elections/forms/vr17.pdf, or you can register in person at your county clerk’s office or local Department of Public Safety office.

Don’t wait. Register right away!

9-19-08 ATPE submits testimony to TRS Board

The TRS Board of Trustees met in Austin today to discuss the state of the TRS fund. One focus of the discussion was a proposal to invest TRS funds into the construction of toll roads. ATPE submitted testimony regarding this issue. To view it, go to www.atpe.org/Advocacy/LegislativeResources/inputTRSinfrastructureInvestment.asp.

In light of the recent bankruptcy announcement by Lehman Brothers, ATPE also urged the board to sever ties with any investment institutions that have demonstrated inability to effectively manage TRS funds. See below for more information on Lehman Brothers’ bankruptcy and its effect on TRS.

For more information, contact ATPE Governmental Relations.

9-19-08 Wall Street turmoil and TRS

Educators should not be worried. Your TRS benefits are safe.

The Teacher Retirement System (TRS) released the following statement Monday regarding the recent news of Lehman Brothers filing for bankruptcy:

How is TRS Affected by Lehman Brothers’ Filing for Bankruptcy?      

First, it’s important to note that the vast majority of TRS’ investments with Lehman Brothers are part of a strategic partnership agreement that became effective on July 1, 2008. These funds -- about 1 percent of the total TRS portfolio -- are in TRS’ name, held in a separate trust with TRS’ master custodian, State Street Bank, and remain securely under TRS control. These funds are neither held by nor co-mingled with Lehman Brothers. In other words, Lehman Brothers is acting in our behalf to invest these funds in a wide variety of financial instruments. We do not believe that a Lehman Brothers’ bankruptcy will have any impact on these invested funds. While TRS does have direct investments in Lehman Brothers, they represent less than one-tenth of 1 percent of the TRS portfolio. TRS will continue to monitor developments closely and we are taking action to minimize any impacts to the fund.

We have every confidence that our highly diversified fund is well-positioned to absorb fluctuations in the market and thereby best serve the long-term financial interests of our members.

The overall performance of the stock market has been a cause of concern for any interested party for some time now. ATPE expects that the recent announcement regarding Lehman Brothers will most likely deepen those concerns. While the situation with Lehman Brothers will have a negative impact on the TRS fund, educators should take comfort in knowing that the impact will be minimal as TRS’ investment in Lehman only represents one tenth of one percent of the fund. Also, according to TRS, the protections put into place by the board will keep the initial investment from being lost. 

All pension funds and investors are witnessing a period of market volatility where many investments, including private retirement accounts, are losing value. Fortunately for Texas educators, the state of Texas provides a constitutionally guaranteed defined benefit plan to educators in which your pension is determined by several factors. This is why it is crucial that TRS continues to offer a defined benefit plan to educators instead of a defined contribution plan, similar to a 401(k), as proposed by some officials.

ATPE will closely follow the TRS Board’s investment decisions and their response to the current market situation. We will attend the TRS board meeting Thursday and Friday of this week to discuss several issues, including the status of the fund and recent investments.

Stay tuned for updates.

9-19-08 THECB Participation and Success Committee

The Participation and Success Committee of the Texas Higher Education Coordination Board met in Austin Sept. 19 to discuss a uniform GPA proposal. The proposal has raised a number of concerns, including issues related to Advanced Placement (AP) and International Baccalaureate (IB) courses. Several members of the education community, including teachers, principals and school board members testified before the committee. Under the current proposal, Pre-AP/IB courses would not receive additional weight. The majority of the testimony stressed that giving additional weight to pre-AP/IB courses was imperative because the disadvantage of taking a more rigorous course load without the incentive of additional weighting would dissuade many students from pursuing pre-AP/IB courses. Testifiers were concerned that less participation in pre-AP/IB and AP/IB classes will lead to a reduction in the overall level of rigor the average high school student experiences, ultimately leading to a decline in the overall level of college readiness. In addition, many of the testifiers expressed concerns about dual credit courses receiving the same amount of weight as full AP or IB courses since these courses are more rigorous and more uniform than dual credit courses.

The committee postponed taking any formal action until its next meeting in October. For more information, contact ATPE Governmental Relations.

9-5-08 Appropriations Subcommittee discusses incentive pay programs

On Sept. 3, 2008, the House Appropriations subcommittee on Education met to discuss three interim charges; the most important of which being a review of certain Texas Education Agency (TEA) programs, specifically recently enacted incentive pay programs. The committee heard from Legislative Budget Board (LBB) staff, the senior director of educator initiatives and performance for the TEA, as well as TEA Commissioner Robert Scott. 

The LBB provided a history of the three incentive pay programs and what their current status is. This year, the first incentive pay program, the Governor’s Educator Excellence Grant (GEEG), will be phased out, while the Texas Educator Excellence Grant (TEEG) will continue and the District Awards for Teacher Excellence (DATE) will begin its first year. 

TEEG is a campus-based program that offers incentive pay primarily to educators who teach in the top half of economically disadvantaged schools in the state that are recognized, exemplary or are in the top quartile of schools in improvement. The Legislature appropriated $100 million for TEEG for the 2007 school year and $97.5 million for each of the 2008 and 2009 school years.  Currently there are approximately 1100 campuses participating with educators receiving awards from nearly $3,000 to over $10,000. 

DATE is a district-based program (instead of campus-based) and every school in the state is eligible to participate. The Legislature funded DATE with $148 million; 213 school districts are participating in 2008-09.

Overall, Texas is spending more than $347 million on teacher incentive pay programs for 2008-09, which makes it the largest incentive plan in the country.

ATPE supports differentiated bonus pay plans developed at the campus level but continues to oppose incentive pay plans that determine educator compensation based on individual student test scores. ATPE has a long history of working with the Legislature to increase teacher pay and are currently working with elected officials to allow school districts more freedom in determining how to use incentive funds to increase educator compensation, rather than being required to base awards on test scores. During the 81st legislative session, ATPE will be submitting recommendations to both improve the incentive pay plans and to increase overall educator compensation.

If you have questions about any of these incentive pay plans or would like to discuss ATPE’s legislative program, please contact ATPE Governmental Relations.