HB 4802 proposes to provide two cost-of-living increases (7.5% each in FY 2026 and FY 2027) to retired members and beneficiaries of the Judicial Retirement System of Texas Plan One (JRS-1) and Plan Two (JRS-2), whose retirement or death occurred on or before September 1, 2024. While the bill is well-intended and narrowly focused, it raises several fiscal and policy concerns.
The bill requires a significant General Revenue commitment, totaling over $62 million through FY 2027, including a one-time $60.1 million pre-funding cost for JRS-2 retirees. While this approach is designed to prevent the creation of new actuarial liabilities, it nonetheless represents a sizable expenditure during a time when the state faces numerous competing budget priorities. These funds could alternatively be directed toward broader public needs such as property tax relief, K-12 school finance reform, infrastructure, or the stabilization of other strained public retirement systems.
Additionally, HB 4802 sets a potential precedent for other public sector retirees—many of whom have also experienced flat benefit levels amid rising inflation- to seek similar adjustments. Teachers, state employees, and law enforcement retirees, for example, may reasonably question why a select class of former judges is receiving inflationary relief when their own systems remain underfunded or stagnant. This raises equity concerns and introduces long-term fiscal risks if future legislatures feel pressured to extend COLAs to other systems without corresponding structural reforms.
The bill also runs counter to a growing preference among fiscal conservatives for transitioning away from defined benefit retirement plans. Enhancing fixed payouts for a closed class of retirees may be viewed as entrenching an outdated model that ultimately exposes taxpayers to unfunded or politically sensitive liabilities. Even if HB 4802 does not create new retirement entitlements, it reinforces the expectation that the state will revisit and supplement benefits for retirees after they have left service, increasing pressure on future legislatures.
While HB 4802 does not expand regulatory burdens, increase government staffing, or impact active salaries, it does increase the size of government expenditures in a way that lacks a broad public benefit. It offers no reform, efficiency, or systemic improvement—only a targeted fiscal enhancement to a small, politically influential group. Some lawmakers may be concerned about the optics of granting benefit increases to former judges, many of whom retired with generous compensation, while average Texans continue to bear the brunt of rising costs.
Finally, while HB 4802 does not directly impact the pension formulas for current legislators (which are tied to judicial salaries), it may reinforce public perceptions that lawmakers and judges operate under a different set of retirement rules than ordinary state employees and taxpayers. This dynamic underscores the need for caution and consistency in state retirement policy.
In summary, although HB 4802 is limited in scope and well-intentioned, it represents an unnecessary fiscal outlay, establishes a problematic precedent, and fails to align with broader efforts to prioritize spending or modernize retirement systems. For those committed to fiscal restraint, structural reform, and equitable treatment across retiree groups, Texas Policy Research recommends that lawmakers vote NO on HB 4802.
- Individual Liberty: The bill enhances the financial security of a small group of retired judges and beneficiaries, many of whom have not received a cost-of-living adjustment in nearly two decades. By increasing their monthly annuity payments, the bill helps preserve their purchasing power and independence. This can be seen as supportive of individual liberty in retirement, particularly for those who rely on fixed incomes. However, this benefit is limited to a privileged class of former public officials, and there’s no extension of similar support to other public retirees, such as teachers or state workers, which raises questions about fairness in how liberty is promoted or protected across the broader population.
- Personal Responsibility: The bill rewards prior public service, but it does not promote the principle of personal responsibility in a forward-looking sense. Since the pension systems involved are defined benefit plans funded by taxpayers, the benefit increases are not tied to individual contributions or performance, but are legislatively granted. While not a new entitlement, the retroactive enhancement may be viewed as inconsistent with the idea that individuals should save and plan for retirement without relying on future legislative action to increase benefits.
- Free Enterprise: The bill has no direct effect on the private market or economic freedom. It does not regulate, restrict, or subsidize private enterprise, nor does it affect competition or entrepreneurship. However, to the extent that growing public pension obligations crowd out funding for economic development, infrastructure, or tax relief, there could be indirect long-term consequences that inhibit the state’s ability to foster a more robust private sector environment.
- Private Property Rights: There is no impact, positive or negative, on the protection of private property rights. The bill does not involve regulation, seizure, or restriction of private property.
- Limited Government: This is where HB 4802 most clearly conflicts with liberty principles. Although it doesn’t create a new government program or regulatory regime, it increases government spending to enhance retirement payouts for a specific class of former officials. The bill imposes a $62.4 million General Revenue obligation, largely in a one-time pre-funding cost, with ongoing annual expenses for JRS-1. It does so without structural reform, without improving system solvency, and without offering broader taxpayer benefits. Critics may also view this as a special carve-out for a politically connected class, undermining the principle that government should be restrained, equitable, and transparent. Moreover, it risks setting a precedent for future unfunded or politically driven benefit enhancements across other public retirement systems, which further challenges the idea of restrained, predictable governance.
