Thorny path ahead at the Capitol
Clearing the halfway point of the legislative session on Monday, few governors have been as successful as Bobby Jindal. Yet the first may have been his better half, given the trouble lying ahead with pensions, prisons and—scariest of all—a budget teetering out of balance.
Regardless of how one judges his education agenda, passing so many major changes in so short a time with so few compromises was a feat of executive willpower over the legislative branch, which more resembled a twig.
Reordering the public retirement system, however, is proving to be a thornier affair. Before the Legislature took up the retirement bills, the administration had to completely rework the original proposals, for which legislators had been catching hell from state workers, who, counting college personnel, live in practically every district.
The governor's first concession, to use the increased employee contribution, from 8% to 11%, to pay down pension debt instead of filling in the budget, opens about a $70 million budget gap, without a plan, so far, to cover it.
The second concession replaces the proposed retirement age increase to 67 for most workers with a two-tiered, sliding-scale formula to determine eligibility and benefits. The rewritten plan, which appeared at the start of the Senate Retirement Committee meeting last week, seemed to baffle senators, but they passed it out anyway, with promises from the chairman, Sen. Elbert Guillory, D-Opelousas, that everything would be fixed on the way to the Senate floor. When that and other retirement bills come up for debate this week, many questions and concerns await.
Not the least of them is about the constitutionality of the measures, which the Legislature's own auditor has called into question. Do the retirement rules that were in effect at the time of hiring form a contract, not to be changed unilaterally years later? Team Jindal says that benefits accrued already can't be taken away, but, going forward, the terms can be altered. State workers say that courts will find otherwise, as they have in other states, if legislators don't say no first.
The original bill to authorize the sale or lease of the medium-security prison in Avoyelles Parish was not, of itself, a major money deal, but it now represents this session's most significant vote on privatization. (The massive, ongoing privatization of a large part of the Medicaid program was authorized in 2010 by budgetary sleight of hand, without a direct vote of the Legislature).
After the prison bill just squeaked through the friendly Appropriations Committee, the governor's team changed course on the House floor, jettisoning the sale authority and asking only to be able to lease the facility to a private operator. Opponents charged that the potential reduction in prison-guard compensation from about $57,000 to $33,000 would take food off the tables of loyal state workers, assuming they are hired by the private contractor.
Once the bill was amended, the governor's team cautiously put it back on the calendar in order to recount the votes and avoid an embarrassing defeat.
Jindal had room to maneuver on the difficult legacy lawsuits issue, concerning the cleanup of contaminated oilfields, until Sen. David Vitter interposed himself between the governor and the business lobby. As things stand now, if there is no resolution of the issue again this year, the senator will see that the governor gets blamed for it.
Then there's the budget, questionably balanced as it is. The Legislature could find itself short by another $200 million unless sluggish tax collections rally. Regardless, the administration avers that the budget will be balanced without tax increases, which can't be considered in this session anyway, according to the constitution.
Here's Jindal's deeper problem. Since before he was first elected, the Republican mantra has been that Louisiana does not have a revenue problem, but a spending problem. We have not heard him disagree. If this budget has to be balanced with more deep cuts to higher education and health care, on top of those made last term, the question will be asked: If Jindal has controlled both revenue and spending for five years now, what—or who—is the problem?
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