05 March 2005

The Good, the Bad, and the Ugly: Prefiled bills -- Week of Mar. 4, 2005

THE GOOD: When I received communications from the Teachers Retirement System of Louisiana saying they opposed SB 7 by state Sen. Walter Boasso, I figured this would be a strong candidate to be the best pre-filed bill of the week. Even though a very few bills got prefiled this week meaning there was little competition for this award, this one probably could win almost any week, because it is a very necessary change needing to be made to the retirement systems of public employees in Louisiana.

Simply, the separate systems, one for educators, and the other for state employees, are having the same threatened future underfunding problems as several other public employee retirement systems in the state because they are too generous. The current system allows people as young as their early 50's to draw retirement for most at 75% of the average of their highest three years of salary (and then many of these people go right back to work full-time elsewhere). You could be in your early 60's and draw 100 percent. I don't know of many, if any, pension systems in the private sector that are so generous.

The bill would clamp down on future employees only. It would raise slightly the contribution level and essentially force everybody at least to work until 60 for full vesting in the system (leaving earlier would cause a refund of contributions compounded at a low rate of return). It also will probably slightly lower the level at which benefits are computed by spreading out the average over five years. This will put the systems on more solid ground.

But perhaps the major reason why the TRSL has come out against the bill is that it drastically changes the governance of it. Instead of a board selected mainly by the members/retirees, the majority on the new board (which would combine both TRSL and the Louisiana State Employees Retirement System) will be comprised of elected officials or their designees and nominees from the for-profit and non-for-profit sectors, taking control out of the hands of the organizations.

Because of the huge stash in the funds these two boards administer, and their inherent inefficiencies and past records managing them, it's probably best that there be more popular oversight of them. While there may some trepidation at giving politicians a small increase in representation on the board, the fact that over a third of the new board will be of investment professionals more than offsets this concern. This is a necessary reform to ensure solvency of the funds and increasing the chances of professional management of them.

THE BAD: Even in a week of slim pickings, an objectionable bill is out there. I know there have been lots of past problems at the Lake Charles Harbor and Terminal District and SB 8 does address satisfactorily the issue of stevedores' contracts (in leaving them to the director's discretion only up to one year in length), but state Sen. Gerald Theunissen's bill watering down the requirements to be port director by leaving this option to its board only invites cronyism. Surely a qualified candidate can be found meeting the existing qualifications of "a four-year degree from a college or university that was, at the time the degree was granted, accredited by a nationally recognized higher education accrediting agency recognized and approved by the Louisiana Board of Regents" with "at least five years of experience in port operations, trade or industrial development, or business or public administration." (HB 28 is its companion).

THE UGLY: Even an ugly bill can be found this week, because of Louisiana's love of writing details of local governance into the law. State Sen. Robert Adley's SB 6 actually does a good thing, making the membership of the Bossier Levee District nine rather than eight to reduce the possibilities of tie votes. But it also gives the governor another chance at a patronage pick over a local agency and begs the question, why have these levee districts in the first place?

SCORECARD: 25 House prefiles, 7 Senate prefiles.

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