Data show LA state workers must make up for mistakes

Now at the plate for Louisiana policy-makers, it’s retirement system reforms. Supporters argue they are needed to put shore up a shaky and unsustainable financial situation, while opponents claim they unfairly target the compensation of the state employees involved. The latest data show the reform case has greater validity, and points to change needed beyond the current batter.

The changes for most current employees would increase paycheck deductions for retirement pensions from eight to 11 percent in order to finance the growing unfunded accrued liability of the Louisiana State Employees Retirement System, extend out the regular retirement age to 67, and use a five-year rather than three-year average to compute pension benefits. In large part, opponents express qualms in that they assert state employees are relatively underpaid to what they should be, and that if any future deficit would arise in the ability to pay pensions, it is the responsibility of the state, i.e. taxpayers, to come up with the “promised” remuneration rather than employees contributing more to their own retirement savings. To some degree, the arguments are related; because state employees are “undercompensated,” therefore it is the duty of the public to make up any shortfall.

However, the data point to the opposite conclusion. While no comprehensive study has looked at Louisiana specifically, the most recent work from 2009 by U.S. Bureau of Labor Statistics economists, Congressional Budget Office staffers, and researchers in academic settings shows that in measuring total compensation in comparing jobs of similar duties, all of federal, state, and local government employees are overcompensated compared to the private sector. In the federal instance, a retirement package judged 3.5 times higher than that of the typical private sector worker doing the same tasks led to a 16 percent premium in total compensation. Without even factoring in retirement benefits, salary and current benefits of state and local government employees nationwide are 10 and 21 percent higher, respectively, than private sector employees doing similar work. This confirms differentials observed in other studies and data of years past, and it would be highly unlikely that Louisiana’s data were skewed much lower.

Omitted date discovery shows opposition's disingenuity

We didn’t ask for it, but opponents of elementary and secondary education reform gave us a final demonstration of disingenuity with comments about one bill accomplishing changes after they lost the battle of ideas over it.

While the general contents of the bills have been known and discussed for months, by candidates and research organizations, the specifics came to light just before the beginning of the session, and 23 days after its start the finished products were sent to the governor after more discussion on them than any bills in the modern history of the Legislature. Included in them were the exact procedures for their implementation.

However, one of them, HB 976, forgot to include a tool of convenience, a date in which the law becomes effective. Constitutionally, the effective date of a law unless otherwise indicated in it is Aug. 1 of the year passed. Six different implementation dates are listed in it, four at the beginning of 2013, but one on Aug. 1 and another on Jun. 30. The former instructs the Department of Education to develop standards, so even if the law wasn’t official that work may proceed. The latter is a deadline for private schools to seek participation in the scholarship voucher program, so that known incentive dangles out there for them even if the law technically has a month to go before coming into force. In others words, in this instance, the omission of an earlier effective date (such as on the governor’s signature) has no practical impact on its implementation.

Consequences of elections amplified by reform votes

Once again, the fact that elections have consequences must be searing itself in the minds of the many formerly comfortable elites invested in the way elementary and secondary education has been – poorly – delivered in Louisiana. Because had things gone a little bit differently a few months ago, these holders of power and privilege would continue to rest easy in a world without HB 974 or HB 976.

These bills, prepared to be signed into law by their most powerful backer Gov. Bobby Jindal, induce choice and competition into the archaic government monopoly system of education and place greater emphasis on merit and demonstrated ability in personnel decisions, passed the state Senate with some margin for error, 23-16 and 24-15, respectively, and would be approved by the House (which had previously approved almost identical version) at roughly the same level of support. But, focusing on the latter, had a few Senate elections gone the other way last fall, this may never have happened.

The final margin meant a swing of five votes would have defeated the measure. And when reviewing some close contests in 2011, it’s easy to see where swapping a thousand or less votes in a district would have put into office people unlikely to vote for this bill.

Jindal back, better positioned, to remake prison system

With a bill to accomplish more of this headed for committee discussion this week, it’s time again to talk about privatization of prisons and reconfiguration of the system, so that means a rehash of the uninformed, nonsensical, and silly arguments made against this from last year. Let’s take a look at the old wine in new containers.

In 2011, Gov. Bobby Jindal proposed the privatization of two prisons to join two others, initially wanting to plow the money paid for them into the operational budget. Eventually, his Administration decided to separate that out and build a budget only counting on savings from contracting. But before anything could happen past hearings on the matter, essentially he yanked the package over what appeared to be intractable opposition.

This year, Jindal is back with a somewhat different plan. This one relies only on the sale of one prison and closing of two others through consolidation, made possible by declining numbers of prisoners in the state, this perhaps caused by policy and administrative changes to place greater emphasis on probation and parole and on the use of technology in correctional facilities. Research, on the state’s two prisons privatized two decades ago, shows this privatization brought cost reductions without reductions in quality, which Jindal’s current budget counts on.

Easter Sunday, Apr. 8, 2012

This column publishes usually every Sunday through Thursday after noon (sometimes even before; maybe even after sundown on busy days) U.S. Central Time except whenever a significant national holiday falls on the Monday through Friday associated with the otherwise-usual publication on the previous day (unless it is Independence Day or Christmas or New Year's when it is the day on which the holiday is observed by the U.S. government). In my opinion, there are seven of these: New Year's Day, Easter Sunday, Memorial Day, Independence Day, Veterans' Day, Thanksgiving Day, and Christmas.

With Sunday, Apr. 8 being Easter Sunday, I invite you to explore the link above.