Can a Texas county pay employees a merit raise retroactively, back to when the money was first budgeted?

Texas AG Opinion JM-1113: Can a County Make Merit Pay Raises Retroactive?

Plain-English summary

Brazos County ran into a timing problem with its merit-raise program. In September 1988 the commissioners court adopted a budget that set aside money for merit raises for a set number of employees, using the previous year's guidelines. But then the county judge, on his own, sent out a memo saying department heads would receive raise guidelines in January 1989. The department heads waited months for guidelines that never came (because the guidelines had not actually changed), and did not approve any individual raises in the meantime. Merit raises were finally approved starting May 1, 1989. The district attorney asked the Attorney General whether the county could make those raises retroactive to the beginning of the budget year, given the delay caused by the erroneous directive.

The Attorney General said no. Article III, section 53 of the Texas Constitution prohibits a county from granting extra compensation to county employees after their services have already been rendered. Paying a raise for the January-through-April period, after those months of work were already done and when no raise for any individual had been approved for that period, would be exactly that kind of after-the-fact extra pay.

The county had pointed to a 1935 case (the Taxpayers' Association case) where a school district was allowed to partially restore salary cuts it had made in earlier years. But the Attorney General distinguished it: in that case, the salaries had been approved and then temporarily cut with an understanding they would be restored, so restoring them was not really an increase. Here, by contrast, no merit raise for any individual employee had ever been approved for the period before May 1, so there was nothing to "restore." Several earlier Attorney General opinions pointed the same way: the fact that a commissioners court could have granted more compensation in the past, or had budgeted funds for it, does not let the court hand out that pay retroactively.

Currency note

This opinion was issued in 1989. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Article III, section 53 of the Texas Constitution is still on the books and still bars retroactive extra compensation, but the statutes governing county employee pay have been amended and recodified since 1989. Anyone dealing with a present-day county pay question should check the current Local Government Code and the latest case law rather than relying on the specific framing here.

Who this opinion affected (as of 1989)

Commissioners courts and county department heads: The opinion told them that budgeting money for raises is not the same as granting them, and that once the work is done, they cannot go back and pay a raise for that earlier period. Raises take effect prospectively from when they are actually approved.

County employees: For workers hoping to recover the pay they would have received had the guidelines arrived on time, the opinion was bad news. The constitutional bar on retroactive extra pay applied even though the delay was caused by an erroneous directive, not by the employees.

County budget and legal officials: The opinion reinforced that an administrative mistake in timing a raise cannot be cured with retroactive payment. The fix has to come through timely, prospective approvals.

Common questions

Can a county pay a merit raise retroactively if the money was already budgeted?
No. The Attorney General concluded that budgeting funds for raises does not authorize retroactive individual raises. Article III, section 53 bars extra compensation for services already rendered.

What if the delay was the county's own fault?
The opinion applied the constitutional bar even though the delay stemmed from an erroneous directive. The rule turns on whether the work was already done and whether an individual raise had been approved for that period, not on who caused the delay.

Isn't this like restoring a salary cut, which courts have allowed?
No. Restoring a previously approved salary that was temporarily cut is not treated as an increase. Here no raise for any individual had ever been approved for the earlier period, so there was nothing to restore.

Background and statutory framework

A commissioners court sets the compensation of employees paid wholly from county funds. Local Gov't Code § 152.011; see Attorney General Opinion H-11 (1973) (salary for county employees, though not county officers, may be set at any time of year). The constitutional limit comes from article III, section 53 of the Texas Constitution, which prohibits a county from granting extra compensation to county employees after their services have been rendered. Fausett v. King, 470 S.W.2d 770, 774 (Tex. Civ. App. - El Paso 1971, no writ). The Attorney General concluded that bar applied to the Brazos County situation, because the commissioners had only budgeted funds for merit raises for a certain number of as-yet-unidentified employees, not approved raises for individuals, when they adopted the budget.

The county relied on Taxpayers' Ass'n v. Houston Indep. School Dist., 81 S.W.2d 815 (Tex. Civ. App. - Galveston 1935, writ dism'd), where a school district was allowed to partially restore earlier cuts to teachers' salaries. The court there reasoned that the partial restoration did not increase the original prevailing salaries, because those salary schedules and contracts had never been abrogated, only temporarily suspended as an emergency measure with a mutual understanding they would be restored. The Attorney General found that holding inapplicable: in that case, salaries had been approved and later cut, whereas here no merit raise for any individual employee was ever approved for the period before May 1, 1989.

Several prior Attorney General opinions supported the conclusion. Attorney General Opinion O-5104 (1943) held that the fact a commissioners court could have allowed additional compensation in past years would not let it pay those amounts retroactively. Attorney General Opinion O-6736 (1946) held that where a commissioners court was authorized to increase an officer's compensation by $750 per year, it could grant an increase in the current year only in proportion to the months remaining. See also Attorney General Opinion MW-68 (1979) (a school board could adopt a policy of granting salary increases in future years, but the policy would not bind the board to actually make them). By the same logic, budgeting funds for merit raises did not give the commissioners court authority to make individual raises retroactive to the date the funds became available.

Citations

Constitutional and statutory authorities:

• Texas Constitution art. III, § 53 (bar on extra compensation to public employees after services are rendered)
• Local Government Code § 152.011 (commissioners court sets compensation for employees paid wholly from county funds)

Cases:

• Fausett v. King, 470 S.W.2d 770 (Tex. Civ. App. - El Paso 1971, no writ) (article III, section 53 bars retroactive extra compensation)
• Taxpayers' Ass'n v. Houston Indep. School Dist., 81 S.W.2d 815 (Tex. Civ. App. - Galveston 1935, writ dism'd) (partial restoration of previously approved, temporarily suspended salaries not an increase)

Attorney General opinions referenced:

• H-11 (1973); O-5104 (1943); O-6736 (1946); MW-68 (1979)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/jim-mattox/jm-1113
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1989/jm1113.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain, the linked PDF is authoritative.

November 9, 1989

Honorable Bill Turner
District Attorney
300 E. 26th Street, Suite 310
Brazos County Courthouse
Bryan, Texas 77803

Opinion No. JM-1113

Re: Whether a county may make a pay raise retroactive to time when funds were budgeted for pay raises (RQ-1722)

Dear Mr. Turner:

You ask the following question:

Are Brazos County department heads prohibited by Article 3, Section 53 of the Texas Constitution from distributing merit pay raises to county employees retroactively from January 1, 1989 to the present, where such merit pay raises were authorized by order of the Brazos County Commissioners' Court on September 29, 1988 for inclusion in the 1989 budget, but were not actually distributed previously due to reliance by such department heads on an erroneous directive from one of the County Commissioners?

You explain that in September 1988 the Brazos County Commissioners Court approved a budget that included a merit pay increase program under which a set number of county employees would receive a merit pay increase. The commissioners court voted to use the previous year's guidelines for granting merit raises. In December 1988 the county judge, acting on his own, distributed a memorandum stating that department heads would receive guidelines for distributing merit pay raises in January 1989. The department heads waited several months to receive guidelines, during which time they did not seek approval of merit pay increases for any individual. Eventually it became clear that the commissioners court had not issued guidelines because the guidelines had not changed from the previous year. Merit pay increases for certain employees were then approved from May 1, 1989, forward. See generally Local Gov't Code § 152.011 (commissioners court is to set compensation for employees paid wholly from county funds); Attorney General Opinion H-11 (1973) (concluding that salary for county employees -- but not county officers -- may be set at any time of year). You ask whether those pay increases may be made retroactive to the beginning of the budget year.

Article III, section 53, of the Texas Constitution prohibits a county from granting extra compensation to county employees after their services have been rendered. Fausett v. King, 470 S.W.2d 770, 774 (Tex. Civ. App. - El Paso 1971, no writ). We think that prohibition applies in the circumstances you describe.

We understand from your brief that the commissioners did not approve raises for individual employees when they adopted the budget; they merely budgeted funds to be used for merit increases for a certain number of as yet unidentified employees. You suggest that Taxpayers' Ass'n v. Houston Indep. School Dist., 81 S.W.2d 815 (Tex. Civ. App. - Galveston 1935, writ dism'd), supports the proposition that the Brazos County merit raises may be made retroactive. In that case the court considered whether a school district could restore in part cuts it had made in teachers' salaries for previous years. In concluding that such restoration was permissible under article III, section 53, the court wrote:

The partial restoration . . . did not constitute an increase in such original and prevailing salaries; hence were not in violation of [article III, section 35,] because such originally prevailing salary schedules and the contracts from which they proceeded had never been abrogated, but instead, due to the financial stringency that caused them, had merely been temporarily suspended as an emergency measure, upon the distinct and mutual understanding between all parties that such was the case and that they would be so restored if and when the cause of making them had been removed . . . .

Id. at 819.

We do not think the holding in the Houston Independent School District case is applicable in this instance. In that case salaries had been approved and were later cut. In this situation no merit raise for any individual employee was ever approved for the period before May 1, 1989.

Several prior opinions of this office support the conclusion that article III, section 53, prohibits retroactive raises in the circumstances you describe. In Attorney General Opinion O-5104 (1943), this office held that the fact that a commissioners court could have allowed additional amounts of compensation in past years would not allow the court to pay such amounts retroactively. Several years later, this office held that where a commissioners court was authorized to increase an officer's compensation by $750 per year, it could only grant an increase in the current year in proportion to the number of months remaining in the year. Attorney General Opinion O-6736 (1946). Similarly, we think that the fact that the commissioners court budgeted funds for merit raises does not give the court authority to make individual raises retroactive to the date on which funds were available for merit raises. See generally Attorney General Opinion MW-68 (1979) (stating that school board could adopt policy of granting salary increases in future years, but policy would not bind board to actually make such increases).

SUMMARY

Article III, section 53, of the Texas Constitution prohibits a county from making salary increases for county employees retroactive.

Very truly yours,

JIM MATTOX
Attorney General of Texas

MARY KELLER
First Assistant Attorney General

LOU MCCREARY
Executive Assistant Attorney General

JUDGE ZOLLIE STEAKLEY
Special Assistant Attorney General

RICK GILPIN
Chairman, Opinion Committee

Prepared by Sarah Woelk
Assistant Attorney General