[StBernard] panel balks at retirement bills

[Westley Annis]

panel balks at retirement bills
 By WILL SENTELL
Advocate Capitol News Bureau
Published: May 22, 2007 - Page: 5A 

A key Senate committee Monday rejected two bills aimed at trimming
Louisiana's $11 billion in retirement debt for about 250,000 former teachers
and state workers.

"There are other priorities," Sen. Walter Boasso, D-Arabi and sponsor of the
proposals, told reporters after both bills were shelved by the Senate
Committee on Finance.

One of the measures, Senate Bill 48, would have required that the state use
25 percent of annual surplus dollars to reduce the state's debt for
ex-teachers, which totals about $7 billion, and ex-state employees, which
totals about $4 billion.

In addition, the legislation would have required that when periodic revenue
forecasts are brighter than initially predicted, 3 percent of the additional
money would have to be used to help finance cost-of-living increases for
retirees.

Boasso, who is running for governor, said those raises happen now only when
retirement investments reach certain levels and they have to be approved by
lawmakers.

Boasso said the legislation is needed because, without action, the state
faces a huge increase by 2015 in what it has to pay annually to reduce the
debt, which has to be paid in full by 2029.

"It is going to be tremendously hard for us to make those payments," he
said.

Boasso's bill would have injected $244 million initially into debt reduction
and cost-of-living increases.

Critics said the bill would put too many restrictions on legislative
spending.

"I don't think it is a good idea to be locked in regardless of what else is
going on," said Sen. Charles D. Jones, D-Monroe and a member of the
committee.

Sen. Francis Heitmeier, D-New Orleans and chairman of the committee, noted
that the state is already required to use 25 percent of the state's annual
surplus for its rainy day fund. If Boasso's bill becomes law, he noted, half
of Louisiana's surplus dollars would be off limits.

The committee voted to shelve the bill without objection.

The panel also set aside another Boasso measure, Senate Bill 130, with
similar aims: retirement debt reduction and cost-of-living increases for
retired teachers and state employees.

The initial amount would have been $99 million for debt reduction and $14
million for increased benefits. The money would have come from an additional
two percent tax on payroll.

A 2005 survey showed that the teachers' system ranks 111 out of 123 systems
in a national survey that compares assets to liabilities. The state
employees' system placed 113th out of 123.