Thursday, June 28, 2007

Times Picayune editorial blasts special retirement legislation

The editorial board of the New Orleans Times Picayune speaks out against unearned, upaid-for retirement benefits for select, politically-connected groups of state employees.

Choices and consequences

When it comes to retirement, most people would agree that workers who put in the most time and money should get the largest benefit.

But apparently the Legislature believes that such personal sacrifice should not be a factor.

Responding to very narrow constituencies, legislators have approved new shortcuts in the state's retirement system so that public employees who made the wrong choice years ago can now reap higher benefits without having paid their dues. Gov. Kathleen Blanco needs to veto these bills.

One of the most egregious ideas is in House Bill 845 by Rep. Sydnie Mae Durand of Parks. The bill would boost retirement pay for almost 450 probation and parole officers who chose not to upgrade to a more lucrative retirement plan in 2002.

Rep. Durand wants to allow those employees to join the new plan retroactively, and that's unfair to other state workers who chose wisely and had to pay their own money to upgrade to the plan.

To eliminate the discrepancy, Sen. Walter Boasso amended the bill to give workers who previously upgraded their plan the choice to get reimbursement for some of their contributions. So instead of fixing one costly mistake, the bill would now extend it to all probation and parole officers, raising the cost of the legislation to more than $9.1 million just in the next five years.

But it gets worse. Instead of requiring that the workers who will reap the extra benefit pay for the cost, legislators want to stick the bill to the public by creating a $65 fee on anyone who goes on probation or parole starting next week.

Many of the people affected would have to pay the fine as they exit prison and go on parole, a time when they are basically indigent. The proponents of the fee see no problem in this. The fee could be collected, they argue, from wages that people may have earned through prison jobs that often pay pennies an hour.

This is heartless. And it's bad fiscal policy.

The board of the Louisiana State Employee's Retirement System is strongly opposing this bill. Yet only one legislator, Sen. Cleo Fields, voted against its final passage.

Another bad idea that has made it to the governor's desk is House Bill 818 by Rep. Alex Heaton of New Orleans. The bill would increase retirement benefits for 21 retired judges, and for 38 spouses of deceased judges, who chose not to become members of the state's retirement system. Cost for taxpayers: $1.1 million in the next five years.

Those judges chose to remain in a noncontributory plan, and they should not be given benefits for which other employees have had to make contributions.

Both of these ill-conceived proposals reflect the disparate retirement scenarios created by changes to the state's retirement system in years past. The system's officials want to address those problems in a comprehensive and fair manner, and that would be a better way to evaluate whether any corrections are needed.

Otherwise, taxpayers will end up funding unfair benefits such as the ones Reps. Durand and Heaton sponsored. And that's as fiscally unsound as one can get.
The LASERS Board of Trustees has submitted a formal request to Governor Blanco that she veto House Bill 845. The text of the letter, accompanied by documentation of LASERS attempts to educate lawmakers about the dangers posed by HB 845, can be viewed here.