The Caddo Parish Commission would
end its term on a high note by dismantling what has become increasingly obviously
an unconstitutional scheme that enriches its members at the expense of the
public and making taxpayers whole.
Last week, the Louisiana
Legislative Auditor issued
a blistering report
castigating the parish for violating the state Constitution with its inclusion
of its elected legislators in the Caddo Parish Employees Retirement System. The
parish established CPERS in the wake of federal law mandating that local
government employees must join Social Security unless they had a specific
retirement system run by local or state governments in which to participate.
While Louisiana has the Parochial
Employees’ Retirement System that permits unclassified parish employees, a designation
that includes elected officials, to join in lieu of Social Security, in 1997 Art. X Sec. 29.1 of
the Constitution went into effect that barred part-time public servant
membership in any pension plan, which includes Caddo Parish commissioners (even
if, because of subsequent legislation, they now pay themselves at a rate as if
they had a legally-defined full-time job). Caddo had participated in PERS, forcibly
because of a court decision since 1993, until a 1999 change to state law. Yet when
in 2000 Caddo set up its own pension system, it included commissioners in that despite
the Constitution’s unambiguous language.
Only recently has the discrepancy entered
the public consciousness, fueled by a lawsuit by area citizens. Parish
officials have defended the arrangement by arguing the amendment affected only
defined benefit systems, or those where fixed pension payouts in perpetuity over
which the employee has no control come from a calculation of average salary
amount over a certain period and longevity. CPERS works under a voluntary defined
contribution system, or where employee and employer contributions go to an
investment account controlled by the employee who can gain arrange for payouts of
varying sizes and durations after leaving office. Parish full-time employees
may refuse CPERS participation and go with PERS if they prefer a defined
benefit plan.
The report notes the absurdity of
Caddo’s contention, as the Constitution makes no distinctions as far as kinds
of pension systems; all regardless of type must adhere to the prohibition of
part-timers, as backed by an attorney general’s opinion.
To make matters worse, had the parish followed federal law, the amount of money
taxpayers would have paid out would have been less than half of the roughly
$286,000 paid into the unconstitutional racket.
And, worst of all, the computation chosen
for the contribution rates jacked up that theft of taxpayer money higher than
necessary. CPERS pegged its employer contribution rate the same as the PERS
defined benefit plan contribution rate, which, because past state policy-makers
allowed generous
government salaries and benefits relative to jobs with similar tasks in the
private sector that created a $20 billion gap in unfunded obligations, has
forced escalation of the employer portions to meet another section of the
Constitution’s requirement that this shortfall go to zero by 2029.
Currently, the parish has hoped
against hope that somehow in the suit’s resolution that a court will legitimize
its eccentric interpretation of the Constitution. But anybody who can read
should know the clear language of the relevant passage should remove any hope
for this Hail Mary. So an ethical response would require immediate extrication
from this unconstitutional situation.
Specifically, the parish should
begin next year to pay its portion of Social Security tax (it already pays the
Medicare portion) for commissioners and the identical deduction from their paychecks
and abandon removing the amounts for CPERS. It also must enter into an
agreement with the Social Security Administration to pay into that system the
amount owed that has accumulated for past living commissioners, former and
present, to bring the parish into legal compliance with federal law.
It then should give living
commissioners the option whether to return the monies in their illegal accounts
in a lump sum or on a payment plan, with the option to garnish salaries of
present commissioners, and arrange with the Internal Revenue Service to make
these withdrawals non-taxable events. If necessary, it must bring legal
proceedings against those who refuse to set up some kind of reimbursement plan
(although in the case of deceased commissioners taxpayers may have to eat those
funds).
Given the straightforward wording
of the Constitution and that this has gone on for 15 years, the parish should
being restitution to taxpayers and the SSA at once. It has no excuse to act
otherwise.
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