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Louisiana Taxpayers Cover the Tab for Over 70 Percent of Local Pensions

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Lawmakers have swept costs under the rug to avoid scrutiny of retirement bills

Louisiana taxpayers are covering all or part of the tab for over 70 percent of the pension plans for state assessors in 64 parishes, according to a 2010 state audit. In fact, taxpayers foot the bill for 100 percent of the “employee share” of contributions in 41 out of 64 parishes.

While the cost of local pension plans have evaded scrutiny, Brian Landry, director of the Louisiana Association of Business and Industry (LABI), sees the current fiscal crisis as an opportunity for policymakers to focus attention on the problem.

There is a long history here.

Legislation was passed in 1999 that allowed for the assessors to have their pension contributions covered at taxpayer expense. Only one negative vote was registered before Gov. Mike Foster signed the bill into law.

“The problem is no one was really looking at retirement costs,” Landry said. “Retirement bills were ignored and the costs were just swept under the rug.  Retirement legislation is an enigma.  You’re at the mercy of actuaries… No one wants to be assigned to that committee, yet one little retirement bill has the ripple effect in the billions.”

Under the state constitution, assessors are authorized to determine the fair market value of all taxable property within a particular parish. Their determination is then subject to review by local governing authorities, the state tax commission and the courts.

Gov. Bobby Jindal has proposed raising the contribution rate for “rank and file” state workers from eight percent to 11 percent to help close existing liabilities. But Rep. Kevin Pearson (R-Slidell) favors an alternative set of reforms that would hike contribution rates for a larger set of government employees. State lawmakers are expected to address pension reform proposals in the upcoming legislative session.

Click here to view the parishes where taxpayers are paying the full cost of employee contributions.

Kevin Mooney is an investigative reporter with the Pelican Institute for Public Policy. He can be reached at kmooney@pelicaninstitute.org. Follow him on twitter.

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  • Anonymous

    The taxpayer has to pay for the mistakes of our politicians. They want to raise our taxes to cover their mistakes when I think they should be on trial for gross negligance on their part. Great article!!

  • ToyotaBedZRock

    That law does not do what you claim.

    It requires the employees pay 7% of salary to the pension fund.

    It gives individual assessors or board of trustees the choice on a yearly basis to either pay all of the employee share or to pay equal amounts as the employed.

    The employees are not who decides to have the employer pay more.

    Also it’s important to remember that public employees earn the same or less than private sector employees even when benefits are factored in.

    Goto page 5 of this PDF for a look at Wisconsin public/private pay: http://www.epi.org/page/-/old/briefingpapers/BriefingPaper290.pdf
    or goto here to explore the site: http://www.epi.org/publications/entry/6759/