Proposal would standardize and cap state-paid sick-leave payouts for TRS retirees; districts would pay excess

Senator Jimmy Higdon presented draft legislation to standardize how sick and personal leave are counted in final retirement compensation for educators in the Teachers' Retirement System (TRS) and to limit the state’s future liability for those payouts.

Higdon said state law currently requires school districts to provide at least 10 sick days per year to teachers; some districts offer more or convert personal or emergency days into sick leave that counts toward final compensation. The bill would ensure every teacher receives equal treatment by defaulting to 10 sick days and permitting two personal days to roll into the retirement calculation; any additional days a district allows would become the district’s financial responsibility rather than the state’s.

Higdon told members the bill does not take away benefits already accrued. He said the state would continue to pay the TRS actuarial cost of leave accrued as of the bill’s effective cutoff (the sponsor referenced an implementation date and said the state would pay for accrued leave up to that date), while districts would be billed for leave earned after the cap for amounts above the standardized 12 days per year. Higdon also said administrators who participated in TRS before July 1, 2008, could still have up to 60 annual days included in final compensation under the bill’s transitional rules.

Higdon proposed uniform reporting requirements and oversight for payroll processors and third-party payroll providers to ensure consistency and accountability across the state’s 177 local school districts and co-ops. The draft also would require TRS to report sick- and annual-leave costs and payer responsibility in its annual valuation.

Committee members asked how rollover days are valued for final compensation. Senator Wilson confirmed the payout is calculated as 30% of the face value of those days and is paid at the retiree’s salary at retirement rather than the value in the year the days were earned. Higdon said the bill would not change that calculation.

Higdon also said the bill would include up to 30 paid maternity-leave days for the birth of a child; committee members noted the bill language currently says "maternity leave for the birth of the child" and that adoption leave could be considered later in the House.

Members asked about the fiscal magnitude of the unfunded liability for sick-leave payouts. Higdon noted the legislature made a large appropriation in 2022 to address accumulated costs; he and members discussed that the ongoing annual unfunded cost is material and needs clearer accounting. One member estimated an annual cost in the neighborhood of $30–$40 million, but Higdon said he would verify and provide exact figures.

No committee vote occurred on the bill during the meeting; Higdon said he would file the bill and return updated draft language and supporting analysis to members.

Ending

The chair closed the discussion and set a tentative next meeting date; the sponsor said he would provide the requested actuarial or fiscal numbers and bill updates.