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October 19, 1999     (512) 463-0300

AUSTIN - The Senate Interim Committee on Finance held its first meeting today, October 18, 1999, in the Texas State Capitol. The committee is chaired by Senator Bill Ratliff of Mt. Pleasant, the vice-chair is Senator Carlos Truan of Corpus Christi, and its members include Senators Mario Gallegos, Jr. of Galena Park, Jon Lindsay of Houston, Royce West of Dallas, Steve Ogden of Bryan, Mike Moncrief of Fort Worth, Troy Fraser of Horseshoe Bay, Gonzalo Barrientos of Austin, Robert Duncan of Lubbock, and John Carona of Dallas.

Ratliff divided the members into five subcommittees, to study each of the five charges issued by Lt. Governor Rick Perry. The subcommittees will present a work plan to the lieutenant governor before November 15, 1999 and a report of their findings will be given to the full committee before July 1 of next year. The committee will compile the studies into a report to be presented to the 77th Legislature, which will convene in January 2001.

Senator Duncan will chair the first subcommittee, which will examine the policies and practices used to invest major state funds and evaluate state investment goals and the funds' performance. The committee will coordinate this study with the Senate State Affairs Committee and make recommendations identifying opportunities for improvements or innovations. Roger Farris, of the Office of the State Auditor, informed the members about the present situation of state funds and investments, including tobacco settlement funds.

Senator Ogden chairs the subcommittee which is in charge of reviewing employee benefit issues facing the Employees Retirement System (ERS) and Teacher Retirement System (TRS). This subcommittee will also coordinate with the Senate State Affairs Committee and related charges. Sheila Beckett represented the ERS, and Charles Dunlap represented the TRS. Beckett and Dunlap briefed the committee on the different retirement, health and dental plans offered by each group, and their efforts to bridge the gap between expenditures and revenues. Ms. Beckett mentioned ERS's active web site, where employees can find information about HMOs and the different plans their system offers. Mr. Dunlap reminded the members about TRS's one million members, only second in membership to California. The number of retired teachers in Texas, as well as the benefits they receive, grows at a higher rate than most states in the country. Both individuals recognized the hope and concern regarding what impact the rapid advances in medical technology and genetic discoveries could have on our growing older population.

Senator West chairs the subcommittee which will review expenditures by agencies and institutions that received appropriations from tobacco settlement funds, to ensure the efficient and effective use of those funds. John O'Brien, representative of the Legislative Budget Board (LBB), gave an overview of where the $17.3 billion, collected in the next 25 years, will go. A portion, $2.1 billion, will be distributed to subdivisions like counties and hospital districts. The rest, $15.1 billion, will go to the state. Most of the proceeds will be invested but some will cover programs such as children's health insurance and higher education.

Senator Mike Moncrief chairs the subcommittee which is in charge of evaluating the financial viability and educational effectiveness of graduate medical education in light of changes in Medicaid, managed care, and other cost factors, including the impact of uncompensated care. The subcommittee will also review the role of the state's teaching hospitals in indigent health care and the role of graduate medical education in addressing health care needs of under served regions of the state. Dr. John D. Stobo, President of the University of Texas Medical Branch (UTMB) at Galveston, clearly stated the worrisome situation of the uninsured in Texas and the country in general. There are between 43 and 45 million people, or about 18% of the United States population, without health insurance. Their number grows each year by one million. Texas leads the country in uninsured, with 24% of the citizens without any type of health insurance. Dr. Stobo showed concern about how this situation affects academic health centers similar to UTMB. These "teaching hospitals" represent 6% of the nation's hospitals, but provide services to 40% of indigent people nationwide. In Texas these facilities cover 60% of the uninsured population. The number of the uninsured has grown 30% nationwide between 1996 and 98, with a greater increase in Texas. This increase is mainly due to the high number of people who lost welfare benefits to get a job that does not provide health coverage. Stobo stated that health care for the uninsured is five times more expensive than health care for those covered. This uninsured group does not receive any preventive care, making their condition more expensive to treat when they arrive at the emergency room. The uninsured are also more likely to continue risky lifestyles, like smoking --half of them do, compared to 23% of the general population.

Ratliff appointed Senator Gallegos to act as a liaison with the State Affairs Committee, coordinating with the committee on their charge related to the study of the effects of federal devolution on state agencies.

Finally, Senator Lindsay will act as a liaison for the sixth charge monitoring the implementation of Senate Bill (SB) 1547, relating to motor fuel tax collection improvements and the impact of the bill on state motor fuel tax revenues. Karey Barton, representative from the Office of the Comptroller, reminded the members that the bill will go into effect on September 1, 2000. Its purpose is to increase state revenues from fuel tax collection, increasing the matching federal dollars at the same time. The bill establishes limits on who could obtain tax free fuel, and sets in place a system to account for where the fuel goes and monitors how revenues are collected. The legislation is expected to help limit fraud by building stronger communication between states.

The committee will announce its future meeting locations and times.

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