Proposing a constitutional amendment prohibiting the use of state funds to pay for the obligations of a local public retirement system.
If enacted, HJR85 would significantly alter the financial relationship between the state and local public retirement systems. By prohibiting state funds from being used to satisfy the debts or obligations of local systems, this amendment may compel local governments to find alternative means of funding their retirement systems. This could include raising local taxes, cutting other services, or seeking additional funding sources. The move aims to protect state taxpayer funds from being used to support local pension liabilities, sending a clear message about fiscal responsibility at the local level.
HJR85 is a joint resolution proposing a constitutional amendment to prohibit the use of state funds for the obligations of local public retirement systems. Specifically, it seeks to amend Section 67 of Article XVI of the Texas Constitution by adding a new subsection that asserts that the state is not liable for any debts or obligations of such retirement systems. Additionally, it prevents the legislature from appropriating any state money to these retirement systems to cover their debts or obligations. The proposed amendment is intended to ensure that local retirement systems remain financially independent from state funding.
The proposal is likely to face contention as it can be seen as another step towards limiting assistance from the state to local governments, especially during financially turbulent times. Advocates argue that it will promote fiscal discipline within local governments, ensuring they do not rely on state resources for their retirement obligations. However, opponents may view this as an unwarranted restriction that overlooks the financial struggles facing numerous local governments with underfunded pension plans. There is a concern that such limitations could lead to pension defaults, harming retirees who depend on these funds for their livelihood.