Republican Lawmaker Faults Practice of Dipping Into State Pensions

State Rep. Kenneth Sheets, R-Dallas, has become the first GOP lawmaker to openly disparage other elected officials for collecting a state pension while receiving a government salary for their elected position, a practice that received notoriety after reports came out that Gov. Rick Perry officially retired to boost his take-home pay.

“It becomes an issue when you are a current elected official that is drawing a state employee pension while receiving a salary as an elected official,” Sheets wrote in an email Wednesday to The Texas Tribune. He was responding to a follow-up question on why he believed it was wrong for Perry to collect a pension while still receiving a government salary. He added the practice puts tremendous strain on the state pension system.

Catherine Frazier, a spokeswoman for Perry, said in an email to the Tribune: "Throughout his 25-plus years of military and state service, Gov. Perry has paid into the state retirement system and, compliant with state law, is simply accessing what he has earned. He continues to pay into the state retirement system, as do all state employees."

Perry faced some criticism after stories about his move to collect his pension came out. While former GOP gubernatorial rival Debra Medina called for an investigation, response among Republicans had been mostly muted.

Sheets is in a competitive race to hold his seat in House District 107, which contains parts of East Dallas, Garland and Mesquite, against Democrat Robert Miklos, a former legislator and onetime chief prosecutor for the city of Dallas.

While fending off criticism by his opponent, Sheets brought up the issue of the governor dipping into his pension plan while still receiving a salary as an elected official.

Miklos accused Sheets of “trying to curry favor” from career politicians, and referenced HB 1974, a bill Sheets filed last session that would have eliminated defined contribution pension plans for state employees and replaced them with 401(k)s — yet exempted current state lawmakers.

That bill “was going to have a devastating impact on the retirement for police and firefighters and state employees,” Miklos said.

Both the Teachers Retirement System and Employees Retirement System of Texas released reports stating the measure would cost the state billions and may have forced benefit cuts for state employees.

“We realized the bill was bad,” said Sheets, explaining that when police and teacher groups came to him to discuss consequences of the legislation he hadn’t considered, he stopped the bill before it reached committee. He also pointed out that he does not participate in the state’s pension plan for elected officials and brought up another bill he filed last session, HB 1303, which he said would have prevented some types of “double dipping” from the state's pension program.

“If you remember, that’s an issue that came up during Governor Perry’s presidential run, and if I’m trying to curry favor, why would I offer a bill like that? Frankly, he’s trying to distort the facts to his own political advantage,” Sheets said of Miklos.

HB 1303 died months before the Tribune reported that Perry had retired as a state employee so he could start collecting pension benefits and still collect his salary. The bill would not have changed the section of Texas law that allows elected officials to collect a pension as a retired state employee while still receiving a salary for their elected position.

When the Tribune asked Amy DeWeese, Sheets' chief of staff, to point to the language in the bill that would have impacted elected state officials, she said, "We were then going to insert a committee substitute to address the issue with elected officials after that had been brought to our attention, but since we were not granted a hearing that bill basically died.” 

As it was worded, the bill would have stopped state employees, such as former heads of state agencies, from retiring from one position and collecting a pension, while still collecting a salary in another position as a state employee.

Sheets said his endorsement from the Dallas Police Association shows he listened to constituents on the pension issue. He has also received endorsements from the Texas Association of Business, the National Federation of Independent Businesses and the Texas Association of Realtors.

Miklos has received endorsements from the Mesquite Police Association, the Mesquite Firefighters Association, the Texas State Association of Firefighters, the Texas Parent PAC and The Dallas Morning News.

Voter history suggests Sheets has a slight edge in the race — nearly 47 percent of the district voted for President Obama in 2008 and 51 percent voted for Perry in 2010 — but politicos in Austin say the race is too close to call. And Miklos said he also has an advantage, as he represented a larger portion of the current HD-107 when he served one term representing HD-101 before redistricting. Miklos lost during the Republican wave in 2010.

According to campaign finance reports filed 30 days before the election, Sheets has received $280,354 and spent $97,777 on his campaign, while Miklos has received $74,020 and spent $55,401.