Fortitude needed to complete needed retirement reforms

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.

Strain governor pursuit possibility good for conservatives

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.

Hypocrisy flows from LA teachers' union leaders

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.

Politicized theory, assumptions negate report usefulness

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.

Lawsuit compels more state exit of managing benefits

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.

Ending LA juco open admissions better uses tax dollars

To date, the slowly building wave of reform that steadily washes around Louisiana higher education certainly has lifted community and technical colleges. As baccalaureate-and-above institutions have experienced retrenchment, these have enjoyed rapid growth and state money that comes with it, courtesy of policy decisions. So these institutions should get out of their getting mode and into their giving mode when it comes to alterations they need to make in response to policy changes they may not find quite as appetizing as those before.

Joe May, president of the Louisiana Community and Technical College System, in a luncheon address complained that the higher education funding formula, which in so many other ways has come to favor those kinds of schools, does not when it comes to penalties it levies for non-completing students. Recent formulaic changes now deliver funds for schools for the number of course completers, not enrollees. The previous emphasis on getting people to sign up for classes created incentives for warm bodies to register, but not to finish coursework or, more importantly, degrees.

May noted that community colleges are open admissions – anybody with a high school diploma or General Equivalency Degree can enroll for their classes. This increases the chance that unprepared students do so, where as a term begins schools must budget for teachers and space according to this number. If a larger proportion of these students drop out of classes or their entire program for that semester, then the school ends up wasting money, such as by hiring teachers not necessary when the final numbers are in.

Jindal bold education plan mostly deserves enacting

Gov. Bobby Jindal finally began to give some details on his proposed elementary and secondary education overhaul for Louisiana. They reveal a plan as bold as his initiative last year regarding higher education yet even more comprehensive, and also, as the other did, in need of some tweaking.

The most revolutionary change from the often-cautious Jindal consists of a dramatic expansion in the use of public money that could go to private schooling. In essence, it would make a large portion of students, because about 70 percent of all public schools in the state would have their students qualify, to receive money to attend a private school if that is their families’ wishes. Further, this money would be excised from the current pool that pays for public schools.

Jindal argues that this would not be a transfer of total per pupil cost for the public schools transferred to private schools, because private school tuition typically is substantially lower than the nearly $12,000 a year the typical school gets for the typical student from the state or local agencies. This actually could expand money available to public schools if they same overall dollar amount of aid or something near it is kept. However, the savings/additional revenues may be less than the Jindal Administration thinks, for not only is the generally lower private school tuition than public school per pupil payment because of greater efficiency, but also because most private schools have endowments or other forms of support that are relatively fixed. That is, as the number of pupils increase that they serve, the less per pupil the other support will pay for, meaning tuition must rise to compensate to maintain.

LA needs to excise wasteful, distortive ethanol laws

While Louisiana, following the federal government, allowed its modest contribution to a boondoggle to expire, also like the federal government for real benefits to accrue it must stop indirect as well as direct support of wasteful corporate welfare.

At the end of 2011, Congress let ethanol subsidies expire. An eclectic coalition of conservatives, who correctly noted the economic inefficiency of subsidizing something with insufficient market demand when cheaper alternatives existed that had no worse externalities, and liberals, who found fault with another market distortion in how ethanol’s demand for foodstuffs jacked up those prices and skewed land use in what they thought were inferior environmentalist ways, built sufficient political power to discourage renewal.

The industry itself went along, but perhaps to deflect attention from a more insidious kind of market intervention: federal requirements of usage of ethanol that continue to increase that will have the same distorting effects that will cost consumers and taxpayers extra money. Louisiana tracked this national trend in a similar fashion, for both good and bad.

Paul win specter little reason to put off GOP caucuses

At one time conceived to occur in a little over a week from now, then presumed they might happen just after Carnival, Louisiana’s Republican Party still has not chosen a date for its congressional district caucuses to determine delegates for the state convention that will meet Jun. 2. This inaction has spawned conspiracy theories both implausible and minor in impact that should make no real difference in deciding on a date.

According to state GOP rules, the six district meetings elect three delegates each to serve as national delegates. Officially uncommitted, at the state convention the body, comprised largely of delegates elected at the district level, will decide whether they can have pledged delegates sent to the national convention officially to a candidate. No constraint exists on selection to the state convention except that it occur prior to the meeting at the state level.

Difficult to take seriously is the notion that a delay comes at behest of Gov. Bobby Jindal, in some gambit to enhance his ability to secure some kind of national office. The thinking goes that the state is not that friendly for leading nominee candidate Mitt Romney, so the longer the caucuses are delayed that could select delegates hostile to Romney, the more time Romney has to build a lead in the national contest that can contribute to a self-fulfilling prophecy of the inevitability of his nomination.

Struggle, need for power clouds Caldwell suit approach

While trying to parse the correct policy concerning the state’s liability for payment of service and when to lawyers is like deciding who to root for when, as recently occurred, two of the most despised teams in college football leave us with a Hobson’s choice for having a national champion, it’s easy to misdiagnose without understanding the dynamics behind it all.

At issue is how legal fees are paid for judgment on BP’s liability for the oil spill disaster of 2010. While many individual plaintiffs active and part of a class action are involved, so is the state. Recently, federal district Judge Carl Barbier ordered a contingency arrangement where, of the total damages, six percent is held out for legal compensation for private plaintiffs, and four percent for governments.

The Gov. Bobby Jindal Administration signaled agreement with the arrangement, but not Atty. Gen. Buddy Caldwell’s office. He prefers a billing arrangement where hours worked are submitted for compensation, and other governments also have criticized it. (They also argue it’s illegal, even though the practice is common.) This dispute has lead to an appeal on the ruling to occur later this month.