Editor: A question of guarantees and fiscal realities

As state legislators slowly begin to turn their attention away from reforming Louisiana’s K-12 public education system and towards the proposed revamping of state government’s retirement system, they’ve got a number of complex questions to address regarding employer guarantees and worker rights. But as Business Report Executive Editor JR Ball sees it, all the rhetoric and debate that’s on the horizon will boil down to a few key questions, namely: Do a majority within the state House and Senate believe it’s OK to change the rules of the retirement game, or do they believe state workers have a sacred contract when it comes to retirement benefits? And who must bear the cost of rescuing Louisiana from its retirement canyon—state workers or taxpayers? Regardless of the answer legislators come up with, Ball says, what goes without question is they must do something about the state’s pension liability. “Louisiana is projected to owe members of its four retirement systems $18.5 billion more—and the deficit is growing annually—than what it has in its retirement bank. The state’s retirement system, thanks to the—ahem—wisdom of past legislators, began with a deficit the day the defined-benefit program was born, and it’s an escalating problem that’s largely been ignored ever since,” Ball writes in his latest column. “At least one study predicts that if nothing is done soon to significantly reduce the retirement debt, then Louisiana’s government will be bankrupt by the early 2020s. Others suggest the day of reckoning won’t arrive until 2030 but, regardless, our state is on a collision course with fiscal disaster.” Read the full column here. Send your comments to editors@businessreport.com.