On May 2, The Austin American-Statesman ran an expose about House members who are hiring former legislators and other employees, classifying them as “full-time,” and paying them a few hundred dollars a month.

The story has reignited the already lousy relations between pro-and anti-Craddick House members.

 The legislators implicated in the first Statesman story were all Craddick opponents — Reps. Jim Dunnam (D-Waco), Craig Eiland (D-Galveston), and Byron Cook (R-Corsiciana). The former members named by the Statesman were Miguel Wise (D-Weslaco), who works for Dunnam, and Zeb Zbranek (D-Winnie) who works for Eiland.

 Later, the paper reported that Rep. Tony Goolsby (R-Dallas), chairman of the House Administration Committee, had briefly hired Jennifer Shelley Rodriguez on his staff. She was classified full-time, earning $500 per month.

All the affected lawmakers have denied to the Statesman any wrongdoing, saying the staff members perform valuable service to constituents.

On April 7, Speaker Tom Craddick asked Rep. Larry Phillips (R-Sherman), chairman of the House General Investigating and Ethics Committee, to investigate. Craddick’s communications director, Alexis DeLee, told the Lone Star Report that the Speaker’s office learned of this from the public information request. The investigation was launched after the Statesman filed the request.

Meanwhile, Democrats and Democratic-leaning interest groups such as the Texas Progress Council and the Lone Star Project have been recycling old Craddick controversies and otherwise trying to blame the controversy on the Speaker.

So what is this fuss really about? Here’s some basic questions and answers.

What benefits does a part-time employee receive that a full-time employee does not? For purposes of retirement, including the rather generous legislative retirement system, there is no difference between a full-time and a part-time employee. For health benefits, a part-time employee has to pay half the cost of employee coverage, while a full-time employee has the entire premium paid by the state. (Dunnam told the Lone Star Report that Wise has declined health coverage.)

Additionally, DeLee told the Lone Star Report that “Employees who work less than 40 hours per week are not eligible to receive longevity pay. A full time employee would be receiving longevity increases that part-time employees are not eligible to receive.”

How did this start? That depends on whom you talk to. The House rules give members broad authority to hire staff and set the terms of employment. The rules expressly state that the House Administration and the Speaker do not have any authority over the individual employees  of a member of the House (House Resolution 2, Section 4.03). DeLee repeatedly emphasized that Craddick learned about this issue from the open records requests.

“I know he [Craddick] started it,” Dunnam said. “I don’t mind the political fights, arguments, disagreements, and those kind of things, but bringing the House Business Office into it and Legislative Council into it – those are basically off-limits, sacred institutions that we have that are not supposed to be brought into the political fight. And he is using those institutions of government to try to go after members.”

Dunnam added that he submitted Wise’s name to the House Personnel Office. “I think it’s safe to say people know who Miguel Wise is …,” Dunnam said. “The form has his name, it has the pay amount, and it has his classification … I have had these forms rejected in the past … These were all approved, and if you look at the form itself that Craddick gets the green copy …,” Dunnam said.

De Lee responded: “The House Personnel Office does not ‘approve’ employee Personnel Action Request forms (the forms that an individual member fills out to hire, assign, set the pay and hours of an employee). The information on the form is entered by the hiring member, and the member attests to the accuracy of the information in the form by signing it. Basic information is required on the form, and it could be rejected if it is not filled out properly. However, substantive details, such as whether the employee is going to be working full or part time, are, by tradition, honored per the member’s submission … Furthermore, the Speaker does not receive a copy of these forms.” DeLee added that the form expressly defines full-time work as 40 hours.

So how does the state employee retirement system work, and how does it affect this issue? The state retirement system is a defined benefit system, meaning that the employee and the state make contributions and the benefits upon retirement are specified by law.

 The state takes the risk with a defined benefit system, as it is responsible for making the investments to ensure the retirement system can pay the pension when the employee retires. Therefore, if employees receive benefits that they are not entitled to, it could endanger the actuarial soundness of the fund, and the state would likely have to use tax dollars to bail it out.

DeLee noted that “The longevity benefit [received by full-time but not part-time employees] has the potential to increase the ultimate retirement annuity. Any employee who is on the payroll would be acquiring additional service credit with the ERS, which would increase the retirement annuity that employee would ultimately receive. If there was ever a situation where additional service credit or longevity was acquired fraudulently, that would undermine the actuarial soundness of the ERS fund.”

The fund’s benefits are paid out based on an employee’s salary and years of service. Legislators receive their annuities based on the salary of a state district court judge, whereas regular state employees have their annuity value determined by the 36 highest months of payroll.

 The vesting periods and payroll contribution rates are also different. Legislators who later go into state service do receive employee retirement credits for their work as state employees, though a brochure put out by the Employee Retirement System states that the credits earned as a state employee would pay benefits using the state employee formula, not the higher legislative formula. (ERS would not answer specific questions about employee retirement rules, due to the confidentiality of individual employees’ retirement accounts. It referred the Lone Star Report to the materials on its website.)

So what happens next? The Speaker has asked the House General Investigating and Ethics Committee to look into this. DeLee emphasized that the committee’s investigation “is not with the intent to implicate or exonerate any member, but to determine the facts and thereafter recommend any appropriate action by the House.”

At the beginning of each session, the House adopts its rules and a housekeeping resolution, which determines the chamber’s operating procedures.

What policy issues will the Legislature have to confront as a result of this? The right to hire, fire, and set conditions of employment is a closely guarded, very personal prerogative. Even Craddick loyalists might grimace at the thought of the Speaker’s or the House Administration Committee’s having any role in selecting or policing staff.

Still, the House does have a responsibility to taxpayers. It will have to decide whether any rule or housekeeping resolution changes are necessary and, if so, what those rule changes would entail. Another question: How many restrictions do the House members want to place on their hiring flexibility?

Given the very poor relations between the pro- and anti-Craddick factions in the House, expect a high-volume debate on the matter this fall.

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