‘Business Report’: Generous public pensions in La. are unsustainable

For the past two years, the Livingston Parish School Board—facing multimillion-dollar deficits—has declared financial exigency, forcing hiring freezes and unpaid workdays for teachers just to balance the budget. Partly to blame are retirement costs, which have swelled by $10 million in four years. The public school system this year will fork over $26 million for pension benefits—more than it will spend to both feed and bus its 24,000 students. This year, East Baton Rouge Parish will spend a whopping $91.2 million on retirement expenses for its employees. That’s $41 million more than it spends on public works, $7 million more than it pays to fund the police department, and more than five times what it costs to operate CATS. And in St. Francisville, Mayor Billy D’Aquilla has started hiring part-time law enforcement officers for the police department. The reason: The city can no longer afford to pay the rising cost of retirement benefits for full-time employees. It’s the dirty little secret about government pensions in Louisiana. The billions in unfunded accrued liability debated among legislators, the millions lost on golf courses and questionable hedge funds, and the escalating employer contributions all sound like someone else’s giant fiscal nightmare. But the reality is that this big black hole hits us right where we live, taking money from our children’s classrooms, as well as from our community police and fire departments, and demanding more of our tax dollars than we spend fixing roads, improving parks or providing public transit. Read the complete cover story by Penny Font in the new issue of Business Report here.