A Plan to Control State Spending

PART I
Where we are and how we got here

The state’s budget malady is the worst Louisiana has seen since the 1980s oil bust. The Legislature and new Gov. John Bel Edwards face an immediate, stupendous shortfall for the current year and even bigger ticket problems next year and in the long term. The governor is recommending major revenue increases to help solve the problem.

The Public Affairs Research Council of Louisiana recommends that the governor and the Legislature submit strong and specific assurances for budget cuts, controls and cost containments prior to approving tax increases. If additional revenues are to be extracted from business and individuals, then those taxpayers have a right to know what kind of government spending envi- ronment state leaders intend to promote. This point is par- ticularly important because the tax debate in the special session comes before the budget process in the regular session. 

The governor and the Legislature should submit strong and specific assurances for budget cuts, controls and cost containments prior to improving tax increases. 

Read more at the source link below

Source: http://www.parlouisiana.com/dynaengine/loadDocument.cfm?site=1002087&doc=A%20PLAN%20TO%20CONTROL%20STATE%20SPENDING%5FFINAL%2Epdf

Local educators question proposal to overhaul state's retirement system

Local education experts question a Baton Rouge legislator's proposal to address a growing state employee pension system burden saying the plan is short-sighted and could hurt efforts to hire and retain quality teachers.

Jackie Lansdale, president of local teachers union Red River United, said the proposal — which endeavors  to overhaul the state employee pension system — doesn't address serious issues in the state's education system. Lansdale would rather bill sponsor, Rep. Barry Ivey of  Baton Rouge, address getting more qualified teachers in classrooms. Lansdale also was concerned whether or not the proposed legislation would be viable on the district level due to budget constraints.

"Does it really fix the problem that we're having in public education or does it further undermine?" she asked. "We don't think it fixes what needs to be fixed."

Read more at the source link below

Source: http://www.shreveporttimes.com/story/news/education/2016/02/11/bill-reform-states-pension-met-silence/80185338/

Louisiana Public Pension Coalition Expresses Disappointment as Veto Override Session is Cancelled

FOR IMMEDIATE RELEASE

Contact: info@lapublicpensions.org

(BATON ROUGE, LA) - The Louisiana Constitution provides for a veto override session unless a majority of the House or Senate submit signatures in opposition to it. Twenty-six Louisiana Senators opposed to a veto-override legislative session to examine the vetoes made by Gov. Bobby Jindal submitted their signatures by the deadline July 16th Deadline. 

One of the driving issues behind support for an override session was the Governor's veto of HB 42 by Rep. Sam Jones (D-Franklin), which provided for a fully funded cost of living adjustment (COLA) for retirees in the four state pension systems.

"Obviously, we are disappointed that the Senate could not muster the courage to stand up to this Governor, who has for too long disrespected and abused public servants." said Louis Reine, Louisiana AFL-CIO President and LPPC member. "In many parishes, public pension income is the number one source of income. This refusal to override the Governor hurts working families, and hurts our local businesses." 

The COLA would have provided for an average of about thirty dollars a month increase for retirees and was fully funded through investment returns of the system that are already set aside for this purpose. The modest increase in income would not have begun to offset the increasing costs of retiree healthcare that has resulted from the Jindal Administration’s misuse of the $300 million surplus inside the Office of Group Benefits (OGB). 

"Although we are disappointed, we look forward to better leadership on pension issues in the next administration. I know a lot of retirees will be looking very closely at the candidates for Governor this year." Reine said.

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Contact your Legislators: SB18 Makes Mockery of Promises to Members of the Teacher's Retirement System!

On Monday 5/18 Sen. Adley will offer a substitute bill to his SB 18 in the Senate Retirement Committee that will propose to shift Unfunded Accrued Liability (UAL) payment costs from Higher Education to K-12 school systems. This dangerous idea will cause local school boards to have increased employer contributions to TRSL, depleting resources for classroom instruction and resources for local school boards, and likely leading to higher local taxes to replace funding siphoned off by this bill. The move would break agreements that have been in place for more than 25 years that base employer costs on a percentage of payroll, rather than liabilities created by the split groups of Higher Ed vs. K-12. Ultimately, this measure doesn't address the real, underlying problem: Louisiana has cut higher education more than any other state. Rather than punishing K-12 to benefit the higher ed budget, legislators must prioritize higher ed funding to meet their obligations and keep their promises. 

Some problems with the substitute bill are as follows: 

- The State's UAL payments to TRSL are designed to be shared among all participating employers and paid as a percentage of payroll. (La. R.S. 11:102 & 11:927) But, with the creation of the Optional Retirement Plan (ORP) in 1989 (Act 90), the payment method remained the same.

- UAL payment method provided for equity among ALL TRSL employers.  Based on this method, higher education pays its appropriate share.  Higher makes up 25% of payroll, while K-12 makes up 75% of payroll.

- SB18's proposed substitute bill would shift more than $83 million annually in retirement liability from higher education to K-12.  This cost shifting scheme would increase the K-12 employer contribution rate by more than 2.5% annually, beginning July 1, 2015, forcing already budget strapped K-12 school districts to cut vital services to students, like teaching positions.

- Proponents of SB 18's substitute bill claim that Higher Education has been and is currently subsidizing K-12 when it comes to retirement liability. To the contrary, K-12 systems have been participating and paying into the TRSL since 1936 and make up 75% of payroll, while the LSU system has only been participating and paying in since 1979 and only makes up 25% of payroll.  

- 25 years ago, there a contract was formed which requires every employer pay by % of payroll. This is fair since the passage of ORP let higher ed divert people out of the Defined Benefit plan. Breaching that agreement amounts to breaking a promise to the people of Louisiana, and the members of TRSL. 

- The proposed arbitrary allocation of shared assets to each group of employers 79 years into plan's existence raises serious concerns about the overall effect on the health and longevity of the retirement system. 

Click the button below to contact the members of the Senate Retirement Committee and ask them to VOTE NO on SB18, and seek real solutions to fund Higher Education!

HB 42 State Employee, Teachers Retiree COLAs Alive

The COLA accounts of the pension systems have the $350 million in them necessary to cover the pension check raise.

Jones said the financial condition of retirees — many already living on limited fixed incomes — has changed for the worse because of increased health insurance premiums and copays. “They can’t pay for medicine,” he said, adding that he thought the double-digit increases in retirees’ state Group Benefits insurance plans caused by administration was “mismanagement.”

Facts and Myths about the Proposed Benefit Increase for Retirees: HB 42 (Rep. Sam Jones, D-Franklin)

A cost of living adjustment (COLA), also referred to as a Permanent Benefit Increase (PBI), has been proposed for some retired state workers. Here's what you should know about it. 

Facts about the proposed COLAs:

·      HB42 (Rep. Jones) will provide for 1.5% COLAs for retired state employees (LASERS), Teachers (TRSL), School Employees (LSRS), State Police (LSPRS) are fully funded and have a $0 impact on the state general fund.

·      The proposed PBI for retirees in these systems would provide for an average of $30 a month in increased pension benefits.

·      This increase will be dwarfed by the increases in Office of Group Benefits (OGB) health insurance increases for these workers - $58 dollars per month for family premiums, increased copays and increased prescription drug copays.

·      Because members of the four state systems impacted by HB42 do not get social security, they do not get inflation adjustments or increased social security or any other retirement benefit outside of their public pension.

Myths about the proposed COLAs:

·      Taxpayers pay for COLAs.

o   Cost of living adjustments/permanent benefit increases are funded with investment earnings of the contributions that employees make into the retirement systems

·      COLAs undo the Reforms that have improved the funded ratio of the systems.

o   Since COLAs are fully funded through the experience account, they do not reverse any of the savings realized through recent reforms like changes to the final average compensation, moving to entry age normal and changing the retirement age.

·      Retired State Workers, Teachers and School Employees, and State Police don’t need a cost of living adjustment.

o   With increases in health insurance and other household costs, and with members of some of our retirement systems living below the poverty line even after 25 or 30 years of service, this COLA is much needed.

o   In many parishes, public pension income is the number one source of income. For this reason, this modest increase in monthly income will have a big impact on local economies.

Click below to contact your legislators and urge them vote for HB 42, a fiscally responsible way to impact local economies and bring more dignity to retirement for state workers!

Negotiations fail; Firefighter pension fight headed to court, Baton Rouge

Negotiations between New Orleans firefighters and city officials have failed, leaving a protracted legal battle and jockeying in the state Legislature as the likely arenas for their ongoing dispute over firefighter retirement benefits.

A working group established by Mayor Mitch Landrieu, which served as the vehicle for the negotiations, met for the last time Monday night in front of a City Hall auditorium packed with angry firefighters who say the city is trying to renege on promises they were made when they signed up for a dangerous job.

Firefighters and city officials on in the working group were miles apart on what the basic elements of a recovery plan would include.

The meeting did make clear just how dangerously underfunded the retirement system is, however.

Read more at the source link below.