Thursday, January 14, 2010

State employee retirement system ripe for overhaul, House speaker says

Louisiana's speaker of the House on Wednesday pledged a strong effort in the spring lawmaking session to change some of the state's most traditional programs, such as the government-employee retirement system and higher education's emphasis on four-year colleges.

Among the targeted programs, Tucker said the state employee retirement systems have accumulated an unfunded liability that will cost the state precious dollars and is crowding out investments in other areas.

He suggested that the state's current system, which pays certain levels of retirement checks in a defined benefits program, should be shifted into a defined contribution system, such as 401(k) programs typical in the private sector, or toward a system that changes the level of defined benefits.

He said Gov. Bobby Jindal and legislators are eager to take risks and make changes.

The biggest issue facing lawmakers in the upcoming legislative session is a $1 billion budget shortfall for the fiscal year that starts July 1.

Over the next two years, the state budget hole is expected to grow to more than $3 billion, largely because of problems with health-care funding.

Revenue cannot sustain expenditures, Tucker said.

He outlined other problems, including:

• Nearly $800 million in funds for roads, nursing homes and health care that the federal government wants the state to repay.
• An outdated public health-care system that cares for more than 25 percent of Louisiana’s residents.
A bloated state workforce.
• The number of people who go to college and emerge with debt but not a degree.
• Declining state tax collections.
• A national health-care package that could increase the state’s Medicaid program costs.

2 comments:

jeinla said...

I certainly applaud tucker's concern and resolve to bring fiscal discipline to state finances, in particular, to get these pesky state employees and retirees under control. Sure, tucker played a leadership role in the absolute squandering of several billion dollar state surpluses but the man is now serious about controlling expenditures. My memory may be faulty but seems it was our esteemed elected officials who chose not to pay the state share of retirement contributions for years in favor of more "important" expenditures.

I wish even one elected official would admit that it's their fault.

abessmer said...

It's apalling that state employees should suffer because of the legislators' misuse of funds.