Both the House and Senate continue to make progress on building their respective versions of the state budget. Earlier this week, the House heard and adopted all Article III subcommittee recommendations, which include an additional $200 million for public education above the base recommendation.  Of the $200 million, roughly $50 million is allocated to be spent on programs and grants such as Teach For America and Communities in Schools, while approximately $140 million is targeted for increasing the state’s contribution to the Teacher Retirement System (TRS) pension trust fund from the current rate of 6.4 percent to 6.6 percent for both 2014 and 2015. Subcommittee Chairman Rep. John Otto (R–Dayton) did indicate that the committee would take up the issue of increasing formula funding at some point in the near future. Riders were released for Article III and although there are few on the public education side, higher education has about 200. In the Senate, the Article III workgroup voted to increase funding in Senate Bill (SB) 1 for the Texas Education Agency (TEA) by $1.5 billion, $1.375 of which is going to increase formula funding by increasing the basic allotment. The remaining $125 million is allotted for providing small increases to the Student Success Initiative, full-day pre-kindergarten, and career and tech funding. The full Senate Finance Committee met yesterday to adopt the Compensation Subcommittee’s recommendations, which include $103 million to increase the state’s contribution to TRS up to 6.7 percent in 2015 (keeping the 2014 rate at 6.4 percent). Both the House and Senate TRS contribution rates are significantly less than the approach recommended by the TRS actuary and subsequent TRS appropriations request, which suggested increasing the rate to 6.9 percent in 2014 and 7.4 percent in 2015. Sen. Robert Duncan (R–Lubbock) was complimentary of TRS, but then stated that we have more work to do with the agency this session to further shore up the trust fund. This was a clear indication of a future attempt to change benefits, such as moving the minimum age to receive benefits to 62. Word also came out of the House this week that there will almost certainly be a push from leadership to make changes to TRS benefits. Also of note: The Senate Finance Committee adopted the Compensation Subcommittee’s recommendations to provide state employees with a 3 percent across-the-board pay raise in 2014 and another 1 percent in 2015, as well as increasing the state’s contribution to the state’s Employee Retirement System (ERS) to 7.65 percent. This is certainly a point of contention, as it would increase ERS to 7.65 percent while TRS would rise to 6.7 percent for only one year. However, for the sake of discussion, it should be noted that the increase to ERS only cost $44 million in general revenue ($65 million total in all funds), while the TRS increase cost $103 million. The Senate is scheduled to finalize the budget next week, and the House should be close as well. Josh Sanderson ATPE Lobbyist