By the logic of his own statement, it turns out that state Rep. Sam Jones hates the people of Louisiana. And perhaps even emulating Gov. Bobby Jindal in the antipathy of which he accuses the governor, neither of which lead to good policy-making in the area of pensions.
The ever-reliably partisan Democrat blowhard, Jones spared no comity, nor any pretense of intellectual coherence, in criticizing Jindal’s decision to veto HB 42, which would have inserted a pension raise of up to 1.5 or 2 percent (depending on the system) for state and teacher retirees and beneficiaries already pensioned for the first $60,000 paid. This would void a law passed last year that would provide such a raise no more often than every other year as part of a strategy to bring down the state’s unfunded accrued liabilities from a stratospheric $19 billion that must be paid off by 2029 at an average cost to the citizenry of $1.5 billion a year.
Essentially, the law would insert at least an extra year’s worth of increase, guaranteed. Current law prohibits an increase for this year, as part of the mandatory skip, but the bill would slot one in. Further, even for FY 2016 and beyond a raise is not guaranteed, for it would be determined on the basis of the change in the Consumer Price Index-Urban indicator by being no higher than that (and capped at a maximum depending on system health which currently would suggest this figure be 1.5 percent), if the fund in question earned an adequate rate of return. If because of this proposed raise that the metrics towards elimination of the UAL were not met, the bill specified that the employer – the state or local agencies who use taxation power to fund salaries – would pay the difference. The math showed in the first five years that this meant an additional liability of $70 million, for which taxpayers ultimately would be liable.
The current law passed last year attempted to shore up in aggregate the financial health of the systems, rated among the poorest of the states, by permitting pension increases only when return on the year ending a year before the increase was sufficiently good and its size dependent upon inflation and the degree of underfunding still present. One part of the bill, added to the original, also made amortization schedule changes that also could improve system health. Another addition delayed the guaranteed increase for a year, which Jindal indicated was acceptable.
But at the last minute, its lead author Jones rejected that delay and the compromise bill passed with the hike effective this Jul. 1 – never mind that the structural changes, as recommended by the systems, could have been passed without including the immediate hike. Jindal, reflecting concerns voiced by major bond rating firms that suggested deviation from the previous year’s enactment was indicative of lack of budget discipline that could lower credit ratings as well as other elected officials’ concerns about inflating the UAL, vetoed the bill.
Which unhinged Jones. He started off his critique with all of the subtlety of a mass shooter by opining that Jindal was “the most deceitful, hateful governor I’ve seen in my lifetime,” and then he got rude, sputtering “Whatever his burning hatred is for state employees and teachers, I guess on his way to Iowa he had to stick his finger at them at one more time,” making reference to Jindal’s all-but-certain quest for the presidency. He also lapsed into men-in-white-coats-with-rubber-truck-coming-to-get-me territory when he declared a purpose of the veto of the bill was to “help a future governor sweep these retirement funds for an illegal purpose.”
He chose not to reveal what he knew of this grand conspiracy that implicated any of the four major candidates running to succeed Jindal, even as all of them have distanced themselves from the governor (perhaps to draw suspicion away from the grand plan Jones alleges exists). Or maybe when he referred to a “future governor” he meant someone who would not run until 2019? 2023? Beyond? Then again, it’s hard to figure out exactly what and how a lunatic thinks, even if for that analytical purpose we’ve been graced with plenty of bombastic coprolites issued forth from his mouth not just on this occasion.
In any event, if in Jones’ world Jindal “hates” state employees and teachers because he did not want make the people pay at least $70 million to transfer more wealth to retired state employees and teachers and their beneficiaries, then it’s entirely fair to say Jones “hates” taxpayers who would have to make up for this and/or citizens who suffered cuts in services as a result. In fact some of those who could end up paying for the additional benefits are, guess who, state employees and teachers. So by his own twisted reasoning, it seems Jones joins Jindal in his “hate” of them.
The UAL is not going away, and choices must be made in how to deal with it. An immediate retiree/beneficiary boost, when the vast majority of these recipients do not depend only on a state pension (because of spouses’ retirement income and double- and even triple-dipping), and many who get only a state pension get a relatively handsome one (given the disproportionately better compensation that state employees get than those who perform similar tasks in the private sector and the average teachers’ salary being roughly $10,000 a year higher than per capita income in the state, often for fewer hours worked per year), and the law in place provides a mechanism for pension increases beginning next year, the case to load up for this year that triggers more costs to taxpayers is negligible.
Sober analysis supports Jindal’s decision, much more so than the rabid foaming-mouth approach taken by Jones. In making good public policy, reason rather than name calling always serves better.