Highlights 77th Texas Legislature - Senate

_____________________ A PPROPRIATIONS
PPROPRIATIONS ACT
77 th Texas Legislature
General Revenue bond debt service costs applicable to the bond debt limit, including the amount contained
in the recommended General Appropriations Act for the 2002-2003 biennium; debt service amounts for the
Higher Education Coordinating Board bonds receiving constitutional appropriation; General Services
Commission leases with option-to-purchase payments; and Master Lease Purchase Program payments
total $376,397,000 for FY 2003. Debt Service on outstanding debt as a percentage of unrestricted General
Revenue is estimated at 1.6 percent for FY 2002. The debt service costs included in the recommendations
total $464.3 million in FY 2002 and $554.3 million in FY 2003, a biennial increase of $57.3 million in
General Revenue Funds for debt service from the 2000–2001 level.
Economic Stabilization Fund (The Rainy Day Fund) - Ended FY 2000 with a balance of $84.7 million. As
a result of natural gas tax collections in FY 2000, the fund received a transfer of $103.1 million from the
General Revenue Fund in November 2000. The transfer plus interest earnings brought the Economic
Stabilization Fund balance to $189.6 million as of January 2001.
$327 million in FY 2002 and $290 million in FY 2003 would be transferred to the Rainy Day Fund under the
comptroller’s 2002-2003 Biennial Revenue Estimate. The comptroller estimated the Rainy Day Fund’s
balance, including interest, will reach at least $881 million by the end of the next biennium, and possibly
increase to more than $1.1 billion.
Recommended Appropriations
The recommended appropriations include continuing the state contribution rate to the Employees
Retirement System of Texas (ERS), the Teacher Retirement System of Texas (TRS) and Optional
Retirement Program at the current level of six percent, resulting in increases in All Funds of $59.2 million,
$263.0 million, and $21.1 million, respectively, to account for payroll growth.
Recommendations relating to group insurance premium contribution rates for state and higher education
employees provide for increases above the FY 2001 rates of 26 percent in FY 2002 and an additional 12.4
percent in fiscal year 2003 to cover anticipated increases in claims and medical inflation. The amount for
FY 2002 includes a 12 percent increase to catch up with current costs. ERS group insurance contributions
will increase by $511.6 million, primarily because of the increase in premiums. General Revenue funding
for Higher Education Group Insurance is increased by $290 million, or 46.7 percent above the 2000-2001
levels, because of increases in premium rates and the need to cover current employee enrollment.
General Revenue funding for public school retirees’ health insurance is increased by $403.6 million, or
164.5 percent. Included in the recommendations is $452.2 million (a $375.9 million increase over 2000–01)
to cover the projected deficit in the trust fund for TRS-Care.
The General Appropriations Act reflects an increase in All Funds of $117.1 million for Social Security
caused by payroll growth. Of this increase, $42.3 million is attributable to institutions of higher education.
The recommendations for Benefit Replacement Pay assume annual decreases resulting from employee
turnover, and reflect a decrease in All Funds of $28.4 million, or 15.3 percent, for Benefit Replacement Pay
for state employees.
Senate Research Center 5