BATON ROUGE, La. (AP) — Gov. Bobby Jindal's proposal to hike the amount rank-and-file state workers pay for retirement has advanced to the full House for debate, despite criticism that tying it to pay raises could cost the state more than it benefits.
It's unclear when the 2 percentage point increase in pension contributions would be levied on employees, since workers would have to get a 4 percent salary boost before a four-year phase-in of the contribution increase could begin.
The proposal has been heavily reworked by lawmakers since Jindal first proposed it in a package of pension changes that he said would help decrease a multibillion state retirement debt.
Several members of the House Retirement Committee questioned whether the pay raise requirement — added by senators before they approved the measure — lessened the point of the bill.
"Didn't we just lose ground, four steps backward and two steps forward?" asked Rep. Jeff Thompson, R-Bossier City.
Rep. Sam Jones, a consistent critic of the governor's package of retirement changes, said the contribution increase bill looks nothing like when it was filed.
"I don't understand where the taxpayers are coming out ahead of this. We have to give $4 before we take back 50 cents the first year," said Jones, D-Franklin. "This seems like a whole lot of complication to me and benefits the taxpayers not at all."
Despite the questions, the House committee voted 10-1 for the complex proposal.
Jindal administration officials defended the measure as having the same purpose as when it was proposed: to contribute more money toward retirement systems in an effort to lower a multibillion dollar state pension debt.
"The intent and the purpose are the same," said Rina Thomas, a policy adviser for the Republican governor.
Sen. Elbert Guillory, D-Opelousas, the sponsor of the bill, described the pay raise provision as making the pension contribution increase "settle much more gently on our employees."
Jones questioned why the state couldn't just send money directly to pay down the retirement debt, rather than increasing salary costs for each agency first.
As it heads to the House floor for debate, the bill calls for the retirement contribution by rank-and-file state workers and public college employees to rise from 8 percent of annual salary to 10 percent, a half percentage point increase each year for four years once the employee's pay has grown by 4 percent over its level on July 1, 2013.
"It sounds like that's going to be a nightmare for bookkeeping," said Rep. Frank Hoffmann, R-West Monroe, who supported the bill.
The money generated by the pension contribution increase would go toward closing the multibillion-dollar gap in what the retirement systems have and what they will need to pay all workers when they retire.
Once the retirement system is 80 percent funded, a benchmark that could be as much as a decade or more away, the employee pension contribution rate would fall back to the 8 percent rate.
The contribution increase wouldn't be levied on state police, prison guards and others deemed in hazardous duty. It also wouldn't hit elementary and secondary school employees.
The boards of the two retirement systems involved in the contribution hike oppose the measure, saying it is an unconstitutional change. Lawsuits are expected if the bill and other parts of the Jindal retirement package get final approval.
Maureen Westgard, director of the Teachers' Retirement System of Louisiana, said the bill leaves a lot of unanswered questions about what would be considered a pay raise. She said college professors, for example, often get research grants and other sources of funding, and she questioned if that would be calculated as a salary increase.
"This is a hairball, and this is a big hairball, and I fear the higher education community will be choking on this hairball," Westgard said.
Other Jindal proposals still pending in the Legislature would raise the retirement age before some state employees could get their full pension benefits, would make it more difficult for retirees to get cost-of-living adjustments and would create a new pension plan for certain new employees.