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There’s not much new to recommendations made by Gov. Bobby Jindal to reform Louisiana’s retirement benefits. All salutary ideas, in the past the Legislature had faltered in passing them into law as the state’s pension crisis became more acute. Thus, we may expect to hear the same tired and inadequate defenses supporting the present regime from special interests as previously, even as it is imperative for pro-reform forces to spread the truth about the situation and succeed in getting the provisions enacted.
Jindal argues, in legislation that will have to be filled Friday in order to meet the 45-day cutoff and advertising requirements of legislative rules, that most new entrants into any of the state’s four comprehensive retirement systems that they go to a modified defined benefit plan, reform the defined benefit plan under which most state employees and retirees now are covered so that retirement happens later to mirror changes in Social Security rules, base defined benefits on a five-year rather than three-year average, grant cost-of-living increases only when sufficient earning to cover them have occurred, increase employee contributions by three percent, allow existing employees under the defined benefit program to enter the new one, called a cash-balance plan, and merge the two largest plans.
Part of the program would address the burgeoning unfunded accrued liability, at $18.5 billion for those four statewide plans and which is required to be at zero across all programs by 2029, by increasing the retirement age, the contribution rate, and restricting cost-of-living increases. The remainder would simply slow its rate of growth by putting many new hires into the cash-balance plan, which would be invested by the existing systems with a guaranteed value of no less than the contributions from the employee, and is portable except that moving to a new job would forfeit the state’s contribution (generally about equal to the employee’s but in some case much higher) and investment earnings.
Posted by Jeff Sadow at 00:00
It’s never too early to think about this state’s highest office, and Agriculture Commissioner Mike Strain’s letting the cat out of the bag about his gubernatorial intentions for 2015 should come as welcome news for Louisiana conservatives.
As a legislator, Strain showed some conservative/reform credentials, averaging nearly 70 on the Louisiana Legislature Log index (where 100 is the maximum conservative/reform score) in his last term in office, capped with a 95 in his last term when he began to pursuit of his current job. In that office, he has upped the ante further with a dramatic reduction in his department’s size from its bloated condition under his predecessor, going from a budget of $102.7 million ($38.6 million from the state) with 829 employees in fiscal year 2008 to $78 million ($29.3 million from the state) with 644 employees in fiscal year 2012. He also has started to unwind some disastrous policy decisions from the past, such as with sugar mill boondoggles.
This real record of accomplishment gives Strain provable and consistent evidence that, not only has he governed more as a conservative than even Gov. Bobby Jindal, but also that he can be relied upon to do so in the future. Any potential Democrats aside, who may pretend to act as conservatives, as opponents, two other Republicans believed also to seek eventually the office cannot match this record.
Posted by Jeff Sadow at 10:00
Even though he’s one of the biggest blowhards in state politics, never say that Louisiana Federation of Teachers Pres. Steve Monaghan can’t go over the top on demand. And he did so again, in an address to the Baton Rouge Press Club, delivering a stunning lesson on what it is to witness a hypocrite.
Monaghan bleated that Gov. Bobby Jindal's recent education policy speech to the Louisiana Association of Business and Industry was uninformed and insulting to teachers. He classified Jindal’s rhetoric as demeaning and therefore it discouraged any engagement by “fair-minded” opposing interests in the determination of education policy.
Of course, engagement just for engagement’s sake never is a good idea but let’s assume there’s value in it, and also that Monaghan therefore himself would act and use rhetoric in a way consistent with fostering respect for all parties and their opinions. Yet if you counted on that, you’d be in for surprise.
Posted by Jeff Sadow at 10:30
Apparently, Louisiana’s Secretary of Health and Hospitals Bruce Greenstein doesn’t suffer fools gladly nor has much tolerance for knaves, judging by his reaction to a report extolling the virtues of Medicaid spending in Louisiana.
The leftist Louisiana Budget Project, anticipating the negative publicity surrounding the huge increase in Medicaid spending Louisiana will be put on the hook for courtesy of Democrats’ Patient Protection and Affordable Care Act (“Obamacare’), attempted an inoculation by claiming increased spending on the program that mainly serves the indigent constituted a positive economic stimulus, hence a cutback would cause economic contracture. In turn, Greenstein, whose department must grapple with the imposed additional costs and also is overseeing a dramatic reform of the system called “Bayou Health,” which promises to increase its efficiency, termed the conclusions “fallacy.”
Former newspaper political reporter Jan Moller, now heading the group, expressed disappointment that Greenstein did not directly address the report’s arguments. While the Secretary did so only obliquely, investigating the assumptions and selective use of information contained in it supports Greenstein’s statement.
Posted by Jeff Sadow at 12:25
As another compelling reason manifests for getting Louisiana out of the active management of health benefits for its employees and retirees, defense of the current inefficient system continues as the Gov. Bobby Jindal Administration gets ready to resume efforts at reform.
Months ago, the Administration proposed to take the book of business that it directly manages, a little less than a quarter of all enrollees, and do with it like it does to all other in the system, have a third-party manage it. In order to get access to that business, it’s estimated that an administrator would pay as much as over $200 million.
Compelling reasons exist for this, besides the one-time bonus. Analysis indicates it would save money both for ratepayers and taxpayers (roughly estimated as $21.2 million annually for the former and about $56.3 million for the latter) and reduce the size of government, joining the other 48 states that do not directly administer their benefits programs. None of these figures or facts (even after my repeated attempts to have Office of Group Benefits, or members of its Policy and Planning Board, which voted to oppose the change, produce any evidence to the contrary) is in dispute. Yet those connected to OGB both past and present and others interested in protecting government jobs continue to voice disapproval.
Posted by Jeff Sadow at 11:30