Louisiana Voice

Cindy Rougeou, executive director of the Louisiana State Employees’ System (LASERS) has been openly critical of Gov. Bobby Jindal’s retirement package for Louisiana Civil Service employees.

Jindal has offered sweeping retirement reforms for some 58,000 active employees—reforms which Rougeou says targets workers who are barred from lobbying on their own behalf, which attempt to force state employees to work longer for reduced benefits, which give legislators false information on the percentage that employees contribute to the cost of their retirement, which ignore that the current unfunded accrued liability (UAL) came about because of legislators’ reneging on their obligation to pay the state’s required contribution, and which violate both the Louisiana and U.S. constitutions.

What’s more, Jindal is concentrating only the LASERS’ $6.8 billion unfunded accrued liability, which is just over a third of the total UAL for the four state retirement systems—teachers, school employees and state police are the others.

But it seems there may be one more: The Jindal Retirement Alternative Plan Enhancement.

Also known as J-RAPE, as in raping state taxpayers, this is an unofficial plan to enhance former legislators who the governor feels were loyal to him before either losing their re-election bids or becoming term limited.

In other words, while the state struggles to find funds to balance the budget for yet another year, the administration sees nothing wrong with padding the state payroll with pathetically unqualified former legislators—so they can enhance their state pension.

Example: former Rep. Noble Ellington spent 24 years in the legislature. If his three highest earning years in the legislature averaged $35,000, he would qualify for a yearly retirement of $21,000.

But wait. He somehow managed to land a job as second in command to Jindal ally Insurance Commissioner Jim Donelon at a cool $150,000 per year. If he remains in that position another three years—five years if Jindal’s retirement reform passes—he will be able to retire $105,000 or $108,750, again, depending on passage of Jindal’s retirement package. Either way, that’s a 400 percent increase in retirement benefits as a political favor from our fiscally-responsible governor.

J-RAPE.

Then there is Jane Smith, another legislator-with fewer years than Ellington-who was term limited but nevertheless landed a $107,500 per year job as deputy secretary of the Department of Revenue, a stroke of good luck that will bump her retirement from $10,500 to $43,000—in addition to her benefits from the teachers’ retirement system. Both she and Ellington possess woefully inadequate experience or qualifications for their positions.

J-RAPE.

An infuriating aspect of these—and other appointments—is that the average retirement for state civil service employees is around $19,000 per year. Yet, neither the appointees nor the governor show any remorse for such blatant misuse of political patronage—all while Jindal holds himself up to voters as the citadel of ethics and all things good and decent.

Troy Hebert is another. After 11 years in the legislature, he was eligible for a whopping $9,650 per year in retirement benefits. But then he was appointed Commissioner of the Office of Alcohol and Tobacco Control. His $107,000 job will qualify him for an annual pension of $40,000 if he stays on for four years, an increase of more than $30,000. If he remains for nine years, giving him 20 years of state service, his retirement would be $53,500.

Another aspect of all this that is particularly grating is that no one in the media asks the obvious questions: How can you possibly justify thumbing your nose at taxpayers and state employees by handing out these six-figure jobs to political cronies? Where is that transparency, that accountability now?

When someone like Edwin Edwards, probably the most media-accessible, media-friendly governor in this state’s history did things like this, reporters were all over him like red beans on rice.

But when Jindal, who seldom holds press conferences because he despises reporters, abhors the media, loathes the fourth estate, does it, no one says a word.

The silence is deafening.

Where’s the outrage?

J-RAPE.

Agencies throughout Louisiana state government use Dell desktop computers almost exclusively so it must be assumed that competitive bids were taken on the equipment and that the state paid the most economical price.

After all, there are literally dozens of state agencies and many more offices within those agencies. Estimates vary as to the actual number of active employees on the state payroll at any given time but it is generally agreed there around 50,000-or more.

And virtually all those employees have a desktop computer—a Dell—assigned to them.

And, yes, of course competitive bids are taken. It’s the law.

Fewer, but still a substantial number of state employees have the need for laptop computers. Those include state police officers and employees who perform much of their work in the field.

Those computers, for the most part, also are Dells.

So one would surmise that when an agency takes quotes on one or two Dell laptops, Dell would give the state the best possible price, given the thousands of computers it has already sold to the state.

One might surmise, but one might be wrong.

First of all, if the purchase price is below a certain amount, informal quotes from vendors may suffice in lieu of going through the more lengthy and involved bid process. That is certainly understandable.

Still, it would be reasonable to expect to attract the most favorable quotes.

One state agency recently asked for quotes for two Dell Latitude E6420 laptops. The quotes from Dell were quite surprising.

The price was $1,448.71 each for a total of $2,897.42. By the time two Kensington Microsaver laptop locks (security cable locks) were added in at $37.29 each ($74.78 for the two), the total cost for the two units came to $2,972.20.

Again, to the non-skeptic, it would seem reasonable to assume that with the state’s volume buying from Dell, the company would have discounted the laptops in order to cut the agency the best deal possible. Think again.

A quick online check of Dell prices found the Dell Latitude E6420 listed for $1,042.51 each—$406.20 less than Dell’s quote for the state agency for the same model. Some, obviously stripped-down models of the same laptop, were going for as low as $670 and $750.

It would be a daunting task to learn how many times this scenario is repeated throughout state government. We do know, however, that this agency followed procedure in requesting quotes and if no one made a better offer it will probably pay the higher price.

Perhaps this is an example of trickle-up economics because it most certainly isn’t trickle-down.

It’s your money.

BATON ROUGE (CNS)—The 2012 legislative session is only weeks away and already the bills are piling. We thought we’d get a jump on last year with an early edition of our (second) annual “Seriously, are our legislators really spending time on this?” edition.

With the issues facing the state—privatization, education reform, stealing contractual retirement benefits from state employees, budgetary shortfalls, and the coercion of college presidents to keep a muzzle on their administrators and professors—one might expect the 144 legislators to be a bit more focused.

One would be mistaken.

Accordingly, we are breaking up this year’s edition into at least two installments—maybe more, depending on just how silly it gets before the deadline for filing bills.

And, having said that, here we go:

• HB 25 by Rep. Henry Burns (R-Haughton): Establishes an exemption to the subject matter exam for licensed arborists who apply for a landscape, grading and beautification building contractors’ license in order to perform certain arborist work. Don’t let Gov. Bobby Jindal know about this or he’ll build an arborist charter school.

• HB 48 by Rep. Lance Harris (R-Alexandria): Creates the crime of theft of copper and other metals. Don’t we already have laws to cover that?

• HB 64 by Rep. Bob Hensgens (R-Abbeville): Prohibits the false personation of a firefighter. We don’t care if it is your house; put down that water hose and move away from the fire.

• HB 88 by Hensgens: Prohibits political uses of public payroll withholdings and deductions. If this passes, you can look for Jindal to veto pronto.

• HB 75 by Rep. Sherman Q. Mack (R-Livingston): Creates the crime of failure to report a missing or deceased child. See HB 48.

• HB 84 by Rep. Austin J. Badon (D-New Orleans), Jr.: Repeals the governor’s authority to grant pardons to persons convicted of offenses against the state and repeals statutory authority for the Board of Pardons. Would arbitrarily slashing civil service retirement benefits be considered an offense against the state? We’re just sayin’.

• HB 107 by Rep. Clifton Richardson (R-Baton Rouge): Creates the Hampton Village Crime Prevention and Improvement District within East Baton Rouge Parish. Considering there are multiple shooting deaths each week in Baton Rouge, why limit this to affluent, mostly white Hampton Village?

• HB 109 by Rep. Simone Champagne (R-Erath): Repeals provision relative to the production and marketing of livestock. And all this time we thought there was only one way to produce livestock.

• HB110 by Champagne: Changes the name of a certain animal disease. That should solve the problem; if the animal can’t find the virus because the name changed, then it won’t get sick.

• HB 120 by Rep. Joseph P. Lopinto III (R-Metairie): Removes the requirement that the operator of an electric chair be present at every execution of a death sentence. Operator of an electric chair? Is this a throwback to railroad featherbedding? Louisiana last used the electric chair on July 22, 1991. We use lethal injection now. Is that “operator” still around? Seriously? As an aside, Louisiana and Mississippi once had portable electric chairs. “We deliver in 30 minutes or your next execution is free” was the states’ motto.

• HB 148 by Rep. Jim Morris (R-Oil City): Precludes a person owes a past due debt to the municipality from running for mayor or alderman in a Lawrason Act municipality. That’s awfully specific but it does provide inspiration for the possibility of more bills to limit candidate qualifications.

• HB 151 by Rep. Cameron Henry (R-Metairie): Removes the exemptions for political calls, thereby requiring political robocalls to obtain copies of the “Do Not Call” listing and to be subject to all other current law requirements. Now that’s a bill we can support. Who let this guy in, anyway?

• HB 161 by Rep. Harold Richie (D-Bogalusa): Establishes a continuing education program for embalmers and funeral directors. Why? It’s not like the customers are going to complain.

• HB 162 by Rep. Jerry Gisclair (D-Larose): Requires drivers to use headlights when driving through a tunnel. How requiring all drivers to just use their heads?

• SB 85 by Sen. Daniel Martiny (R-Metairie): Requires voter approval before local governing authorities may impose civil fines for traffic violations captured by automatic traffic enforcement systems. The camera got me? I vote no.

• SB 87 by Sen. Sherri Smith Buffington: Re-creates the Department of Health and Hospitals. Didn’t Jindal already privatize that department?

• SB 101 by Sen. Elbert Guillory (D-Opelousas): Increases the number of days that games of chance may be conducted. Games of chance: that would be the jobs with the Office of Risk Management, the Office of Group Benefits, public schools, state prisons, DHH and state employees whose retirements are years away.

That’s it for now, but it for certain there will be many more in the days to come and to paraphrase Frasier Crane, we’re watching.

“We are unable to estimate the fiscal effect; there is no reporting requirement for the data.”

–Louisiana Department of Revenue FY 2009-10 report on corporate income tax exemption for the Louisiana Superdome and Zephyr Field.

Gov. Bobby Jindal loves to use looming budget deficits as justification for cutting jobs, shredding state retirement, and privatizing state agencies as ways to bring the state budget into balance and to make state government more efficient and accountable.

But if you examine the state tax exemptions that have become the norm since Jindal took office, you would have to conclude that the state’s financial plight is of his own doing.

The state did not have to fight off a threatened $1 billion deficit last year nor was it really necessary to look for ways to avoid a $900 million deficit this year, a likelihood of which he has already warned legislators.

The question is, did he intentionally create the state’s fiscal crisis in order to justify dumping off the Office of Group Benefits, state prisons, Medicaid, and public education and placing thousands of state workers on unemployment and costing them medical benefits in the process? Is he exploiting a deliberately engineered fiscal crisis in order to revamp the state retirement system?

As incredible as that might sound, consider his veto last year of a 4-cent-a-pack cigarette tax because he didn’t want to impose any new taxes. Forget for the moment that the cigarette tax was a renewal, not a new tax. And forget, if you will, that he was not opposed to an increase in college tuition because, in his words, it was not a tax but a fee.

Forget, too, that his veto of the cigarette tax was in effect turning his back on $50 million a year in badly-need revenue—$12 million directly from tax revenue and an additional $38 million in federal matching funds.

And finally, don’t remind him of his bumbling, stumbling, fumbling of two federal grants totaling $140 million. Those included $60 million in funding for early childhood education and $80 million to fund broadband internet connection to 21 rural parishes.

And the reason there is a crisis in the state retirement systems is because the Legislature and Jindal simply reneged on the state’s contribution requirements.

So clearly, the administration won’t consider new sources of revenue—like maybe eliminating some of the exemptions. Instead, the obvious solution is to require state workers to chip in an extra 3 percent to their retirement contributions.

It would be one thing if that 3 percent went to actually fund their retirements or even to pay down the UAL. Instead, it’s to be used to bail Jindal and the Legislature out of the consequences of their moronic tax policies.

While Jindal has never met a tax he liked, all the corporate tax exemptions that have gone into effect on his watch should raise a few eyebrows. Going into his fifth year in office, there have been at least 113 bills filed that deal with tax exemptions of one description or another. Some of those were duplicates and not all of them passed, of course.

Nor did all of them call for corporate tax breaks, but most did.

Figures provided by the Louisiana Department of Revenue reveal that for Fiscal Year 2006-07, the year before Jindal took office, corporate income taxes were $721 million against exemptions of $972 million.

For FY 2009-10, the last year for which figures were available—and three years into his first term—corporate income taxes dropped by more than half to $435 million while exemptions surged to $1.3 billion.

In some cases, there was not even an accounting of money lost to corporate income tax exemptions. Take the Louisiana Superdome and Zephyr Field, for example, both managed by SMG, Inc.

The Department of Revenue Report on Corporation Income Tax, under the heading “Exemption for Events, Activities, or Enterprises Conducted in Domed-stadium or Certain Baseball Facilities,” made the following observation:

“Any event, activity or enterprise conducted in certain domed-stadium (that would be the Louisiana Superdome) or any open baseball site owned and operated by the state (Zephyr Field), or any of its agencies, boards or commissions, with a seating capacity of at least 10,000 and has a professional sports franchise that participates in Class Triple A professional baseball is exempt from all state and local taxes. The purpose of this exemption is to promote use of the domed stadium.”

Under the heading “Beneficiaries,” was the explanation that “The increased use of the dome-stadium facilities benefits the state and its residents.”

Under the heading “Estimated Fiscal Effect,” the explanation was even more ambiguous. “We are unable to estimate the fiscal effect; there is no reporting requirement for the data.”

This is an exemption that went into effect on May 23, 1985, more than 26 years ago and there is no way to estimate the fiscal impact? There is no reporting requirement for the data?

Well, neither was any data as to the fiscal impact of the sales tax exemption for “state-owned domed stadiums” or sales by “certainly publicly-owned facilities.” Neither was there any explanation as to why state-owned domed stadium was pluralized.

At the same time, sales tax collections for 2006-07 totaled $2.8 billion while exemptions came to $688 million. By 2009-10, sales tax collections had dropped to less than $2.5 billion while exemptions had leaped fivefold to $3.9 billion.

The Stelly Plan that had eliminated sales taxes on food, drugs and household utilities and replaced them with income taxes was repealed under Jindal. That contributed to a decrease in individual income tax collections from $3.1 billion to $2.2 billion while exemptions more than doubled, from $519,000 to $1.1 billion.

The year-to-year total tax revenue losses from all exemptions are as follows:

$1.07 billion in FY 2004-05; $1.13 billion in FY 2005-06, and $2.55 billion in FY 2006-07.

The projected revenue loss for FY 2007-08 was $2.57 billion and $2.8 billion for FY 2008-09, according to the Department of Revenue report for FY 2006-07, former Gov. Kathleen Blanco’s last year in office.

Instead, the actual revenue lost to exemptions for 2007-08 was $6.7 billion, $4.1 million more than the projections. It was more of the same for 2008-09, when lost revenue was $7.2 billion, more than double the estimate. For FY 2009-10 tax exemptions accounted for revenue losses of $7.1 billion and were projected to drop slightly to $6.68 billion for the fiscal year ended last June 30 and back up slightly to $6.8 by June 30 of this year.

While all these figures admittedly are mind-numbing, it is nevertheless important to know that the five-year (FY 2004-05 through FY 2008-09) loss of revenue to the state treasury comes to $18.7 billion.

The combined unfunded accrued liability (UAL) of the state’s four retirement systems?

$18.3 billion.

“Saying that promises are being kept and keeping promises are two different things.”

“The retirement benefits of current employees are part of the package of compensation they were promised when hired; any change to that package is breaking the promise made to those employees.”

–Cindy Rougeou, executive director of the Louisiana State Employees’ Retirement System (LASERS) in a recent LASERS publication on its web page.

With so many retirement bills filed in both the House and Senate, it’s difficult to make heads or tails of them all.

For example, Sen. Elbert Guillory (D-Opelousas), chairman of the Senate Retirement Committee has personally pre-filed 37 retirement bills for the upcoming session which begins at noon on March 12.

His counterpart, House Retirement Committee Chairman Kevin Pearson (R-Slidell), has pre-filed 15 such bills. They run the gamut in addressing retirement issues for municipal employees, registrars of voters, clerks of courts, teachers, school employees, sheriffs and, of course, state employees.

And those do not even include any retirement bills authored by the other 142 legislators.

And while the main thrust is to placate Gov. Bobby Jindal in his efforts to reduce retirement benefits, increase employee contributions, and to tighten retirement qualifications, nothing has been said by the administration to address problems inherent with attempts at pension reform: namely the Louisiana State Constitution.

One person who has not been shy in criticizing Jindal’s plan is Cindy Rougeou, executive director of the Louisiana State Employees’ System (LASERS).

Rougeou says Jindal is seeking to impose an additional payroll tax on state workers in the form of a 3 percent increase in employee contributions—money that will not even be used to retire the state retirement system’s $6.3 billion debt.

She also says that Jindal is:

• Targeting workers who are barred from lobbying on their own behalf, those least able to speak up in opposition to his plan;

• Attempting to force state employees to work longer for reduced benefits;

• Giving legislators false information as to the percentage that employees contribute to the cost of their retirement as compared to the state’s share;

• Ignoring the fact that the current unfunded accrued liability (UAL) came about in the first place because the state reneged for decades on paying its required contribution;

• Attempting to violate both the State and U.S. Constitutions in proposing sweeping changes to the retirement system.

Those are some pretty serious charges, coming as they do from a state employee when the governor has shown himself to be more than capable of retribution against recalcitrant underlings.

Rougeou, however, is said to be beyond the reach of Jindal’s wrath. She is hired by a LASERS board that is elected, not appointed by the governor, thus her unrestrained defense of state employees and her criticism of the governor’s retirement package.

But if Jindal is really looking for a scapegoat, he need look no further than the first floor of the State Capitol where the House and Senate chambers are located.

In 1987 the legislature passed a bill calling for a constitutional amendment that would require all the state’s retirement systems to be actuarially sound with UALs being paid off by the year 2029. Voters approved the amendment but as usual, there was a fatal flaw in the wording of the bill that allowed legislators to begin tinkering with the repayment schedule.

And tinker they did, passing Act 497 in 2009—on Jindal’s watch, by the way—that created a new payment schedule so that the state could reap a savings of $500 million. It is the state’s failure to make the necessary payments to bring the systems into manageable shape that created the current crisis in the retirement funds.

Each year between 1959 and 1969 and from 1983 to 1991, the state failed to pay its required contribution to LASERS. Not once. In 1963, for example, the 6 percent paid by the state was less than half the required 12.26 percent and in 1960, the state’s 6 percent was barely more than half the 11.81 percent required contribution. In 1990, the 7.8 percent paid by the state was far short of the 14.09 percent requirement.

Commissioner of Administration Paul Rainwater, in presenting Jindal’s executive budget for Fiscal Year 20120-13, told members of the Joint Legislative Committee on the Budget that the employees’ share amounts to less than 27 percent of total retirement contributions while the state’s share exceeds 73 percent.

Not so fast, says Rougeou. The administration’s accounting, she said, “apparently formed the basis for the justification that employees should now pay an addition 3 percent of salary toward their retirement.”

She went on to say, “The cost of the accruing benefit in 1988 was 12.8 percent of payroll, which we refer to as the normal cost. Of that amount the employee paid 7 percent and the state paid 5.8 percent. As such, in 1988 the employee contributed about 54.69 percent (of the total) toward retirement. Though somewhat less today, current rank and file employees “are still paying about 54 percent of the cost of their accruing benefit,” she said–double Rainwater’s claim.

So now Jindal is calling on state employees to kick in an additional 3 percent to the retirement fund. That wouldn’t be so bad if the extra 3 percent went to their retirement or even to pay down the UAL, but it doesn’t. The money will go straight into the state general fund so that Jindal can smooth over an anticipated $900 million budget shortfall this year.

Even that would be more palatable if Jindal was doing that across the board, but he isn’t. He promised the state’s college and university presidents that if they’d keep their mouths shut and not oppose his retirement package, they could share in the $100 million savings from university and college employees’ additional 3 percent.

While that comes to less than $5 million for each of the state’s 23 public colleges and universities, it hardly seems fair that they keep their 3 percent in-house while the remaining state employees must pony up their additional 3 percent to keep Jindal’s budgetary boat afloat.

Nor is it fair to tell a 42-year-old state employee with 20 years’ experience that he can scrap his plans to retire at 30 years, that he must continue working until he is 67. And when that employee purchased four years’ “air time” a few years back to enhance his retirement, it cost him $18,000.

If he works until age 67, he will have 45 years as a state employee. State employees currently can retire at 100 percent of their salaries with 40 years’ service. Will he be required to continue paying into the system past his 40 years? What about that $18,000? Will he get that back? He bought the time in good faith and in the belief that the state would honor its commitment to him just as the woman in the state agency next door paid $60,000 for 13 years’ air time. What’s to become of their investments?

Louisiana employees do not pay into social security, which makes any comparison with other systems invalid. Apples and oranges. A lifetime state worker will never qualify for social security benefits as do workers in the private sector.

The governor’s retirement package also contains a provision that retirement benefits for currently active employees be based on the formula of 2.5 percent times an average of five years’ highest income times years of service. That is a change from the current formula that computes retirement based on three years’ average earnings.

As things now stand, that would have negligible impact; employees are going into their fourth straight year without merit raises but extending the work years to age 67 could be devastating to certain employees. Depending on their dates of birth, some employees who retire after 30 years could see their benefits cut by more than half than if he/she had been born one day earlier.

Jindal, while attempting to force state employees to work longer and pay more into their retirement, is also trying to revamp their retirement from a defined benefit to a defined contribution, similar to 401(k) investment account with no guarantee of return.

Former House Speaker Jim Tucker (R-Terrytown) said last year the 3 percent increase in employee contributions was a tax and would require a two-thirds vote of both the House and Senate. Jindal has vowed throughout his term that he will veto any new taxes that appear on his desk and so obviously does not see the 3 percent increase as a new tax any more than he saw college tuition increases last year as a new tax.

But the bigger question is one of constitutionality, both state and federal.

“Many of those employees already have ‘vested’ rights in their retirement benefits,” Rougeou said. “To change provisions such as those targeted would violate the (U.S.) constitutional restriction against impairing existing benefits. She cited Article X, Section 29(B) of the State Constitution which says “…membership in any retirement system of the state…shall be a contractual relationship between employee and employer.”

“And of course the U.S. Constitution in Article 1, Section 10, Clause 1, states, ‘No state shall…pass any…ex post facto law, or law impairing the obligation of contracts…’” she said.

“Proposing changes that are unconstitutional attains only protracted litigation and doesn’t result in a sound pension system,” she said.

She said Jindal should not count on using any of the anticipated $450 million in taxpayer savings resulting from his pension reform to help balance the budget because there will be court challenges if the administration is successful in getting the bills passed.

One must be starting to wonder by now just how many more shell games Jindal will introduce to cover his budgetary backside. Retirement and the privatization of the Office of Group Benefits, state prisons and Medicaid are all on the table this year, so what financial wizardry will he conjure up for the next three years?

“Would attending a rally be considered lobbying?”
“No it would not. A rally is a gathering of people to inspire enthusiasm for a cause.”

“Can I go to public rallies on issues and carry a sign, cheer and boo?”
“Yes you can.”

–Louisiana Department of Civil Service General Cicular Number 2012-004 of February 9, 2012.

“I have had discussion with our attorneys concerning a citizen organizating a rally outside of the hospital. I am directing all employees and physicians not to attend this event either on or off the clock. There are potential serious legal issues with our participating in such an event. Violation of this directive may result in discipline (sic) action against you.”

–Larry Dorsey, administrator of University Medical Center in Lafayette, in a February 1 email to UMC employees directing them to not attend a public rally protesting the elimination of 130 positions at the hospital by the Jindal administration.

The administrator of a state hospital may have overstepped his authority and placed his office in violation of state civil service rules when he sent a short email to hospital employees two weeks ago.

His email actually pre-dated by eight days the email of LSU Systems President John Lombardi that we wrote about last week. It seems to be the trend these days that the administration of Gov. Bobby Jindal will tolerate no outward signs of resistance from state employees.

This, of course, is the governor who touts his openness, his transparency, his accountability while attempting to suspend the First Amendment to the U.S. Constitution: that pesky little guarantee of free speech and free assembly.

Not that he would ever dirty his hands with issuing a direct order; he’s far smarter than that. That’s what his subordinates are for. People like Lombardi who last week sent out an email admonishing his LSU troops to be thankful they still have jobs and not to be critical of Jindal’s budget cuts.

Now we’ve learned that on Feb. 1, Larry Dorsey, administrator of University Medical Center (UMC) in Lafayette issued an even sterner memorandum to the employees of his facility which is facing the elimination of 130 positions.

Word of the impending layoffs at UMC went out in mid-January in the form of an email from Dr. Roxane Townsend, CEO of the Health Care Services Division of the LSU Health System.

In all, seven facilities will be affected by the layoffs, Dr. Townsend said. Those include, besides UMC, Bogalusa Medical Center, Earl K. Long Medical Center in Baton Rouge, Lallie Kemp Regional Medical Center in Independence, Leonard J. Chabert Medical Center in Houma, Interim LSU Public Hospital in New Orleans, and W.O. Moss Regional Medical Center in Lake Charles.

Dorsey was quick to point out to Capitol News Service that there will not be 130 employees who will lose their jobs because some of the eliminated jobs are vacant positions that will be abolished and that some employees would be allowed to “bump” those with less seniority in order to save their jobs. He did not say how many would actually lose their jobs or how many unfortunate souls would be bumped.

The layoffs at the seven facilities, scheduled to take effect on March 5 once they have been approved by the Director of Civil Service is being proposed due to the inability of the Health Care Services Division to realize $29 million in additional federal funding for care delivered to the uninsured and Medicaid population during the current 2011-12 fiscal year, Dr. Townsend’s memo said.

But back to that Feb. 1 memorandum, issued as an email to all UMC employees. Here it is in its entirety:

“I have had discussions with our attorneys concerning a citizen organizing a rally outside of the hospital. I am directing all employees and physicians not to attend this event either on or off the clock. There are potential serious legal issues with our participating in such an event. Violation of this directive may result in discipline (sic) action against you.” (Boldface emphasis Dorsey’s.)

The rally, organized by private citizens who use the hospital, was held on Feb. 2, the day after Dorsey’s email.

Dorsey told Capitol News Service that he issued the directive on advice of his legal staff.

Perhaps his in-house counsel should have sought legal counsel of her own.

The directive, it turns out, is in direct contravention of the provisions of General Circular 2012-004, issued on Feb. 9 of this year by the Louisiana Department of Civil Service and drawn directly from the state lobbying act: R.S. 24:56. That date, by the way, just happens to coincide with the issuance of the Lombardi email.

The circular, re-issued in anticipation of the 2012 legislative session in order to clarify state classified employees’ rights and restrictions, says that classified employees “are prohibited from engaging in efforts to support or oppose a candidate, party or faction in an election.”

But in the very next sentence, the circular says, “These constitutional restrictions do not prohibit a classified employee from expressing themselves either privately or publicly on issues that may be pending before the legislature or other body.”

The circular cautions employees than when speaking publicly on an issue, “make sure you are addressing matters that are of public concern and not personal to your particular work environment.” The elimination of positions at a state hospital would appear to come under the banner of public concern.

The circular also poses several questions, one of which asked if a classified employees attends a public rally, would it be permissible for the employee to “carry a sign, cheer and boo?”

The circular answered that rhetorical question by saying it is permissible for employees to carry signs, cheer and boo so long as the same standard of public concern is observed.

The circular said a classified employee is allowed to be a member of an organization that lobbies before the legislature but that the employee cannot personally lobby legislators.

Active classified employees are allowed to attend rallies conducted by the Retired State Employees Association, even “on the steps of the Capitol so long as the employee is a member of the association and provided the employee is on approved annual leave if the rally is held during normal duty hours.”

To the question, “Would attending a rally be considered lobbying?” the circular said, “No, it would not. A rally is a gathering of people to inspire enthusiasm for a cause.”

The circular also said that classified employees are allowed to place signs in their yards in opposition to or in support of proposed legislation.

The legal counsel at UMC could well be up for special recognition and perhaps even a merit raise from the Jindal administration for doing such an effective job of stifling employees’ First Amendment rights.

Editor’s note: Former State Sen. Butch Gautreaux addressed the Joint Legislative Committee on the Budget following the presentation of Gov. Bobby Jindal’s executive budget and the ensuing queston and answer session between legislators and members of the Division of Administration. Unfortunately, when the last legislator’s question was asked and answered, reporters exited the committee room, unaware that Gautreaux would testify against the controversial proposal to privatize the Office of Group Benefits, meaning his words got little play in the media.

Following is an exclusive reprint of his comments:

Although Governor Jindal has strived to bring transparency to the office of the Governor, the Office of Group Benefits (OGB) sale or its placement in the hands of a third party administrator is a case that denies the public, or for that matter even the legislature, the opportunity to see or understand what is being considered.

When news first came to light last year of an effort to capitalize on the large cash reserve, I called meetings of the Senate Retirement Committee to try to learn the rationale of the sale. I invited all parties including the governor, the commissioner of administration and others involved. Mr. Rainwater did attend the first two meetings but little was learned. When repeatedly asked by panel members why the sale was being considered, Mr. Rainwater was pat on his answer, never swaying from his statement: “the State should not be in the insurance business.”

Remember, the state set up a workers’ compensation company, LWCC in the early nineties that still exists today and seems to function well. The state set up Citizens in response to coastal residents not being able to acquire homeowners insurance. It’s had its problems but is still doing the job. Does Mr. Rainwater advocate getting rid of those two insurance companies?

We just learned last week that the Governor contracted with Morgan-Keegan to do an analysis on the feasibility of selling out or placing in the hands of a third party administrator the PPO for the Office of Group Benefits. As a member of the board of OGB I have not had an opportunity to see the final Morgan-Keegan document or anything else. I can only tell you a little history of a health insurance system that is the envy of the other 49 states. Louisiana has the only self-administered and self-funded health insurance for state workers and retirees. The plan provides competitive rates to members and to the state. Remember, the taxpayers pick up most of the cost. And unlike some other departments OGB has for the last seven years grown in becoming a model of what other states should emulate.

Mr. Rainwater likes to state that we have twice the number of employees in our health insurance department. Of course we do. We are the only state to administer its plan, and at a cost that is a lot cheaper than it can contract for.

Eight years ago OGB was in trouble for an assortment of reasons and something had to be done if the system was to survive. Governor Kathleen Blanco hired Tommy Teague to take over as the director and through his excellent management practices and leadership we saw a system that was wrought with problems and inefficiencies go from a $33Million deficit to a $550Million cash reserve. Let me say that I served on the board of directors during this transition from something very troubling to what has become a shining star. And then when Tommy resisted taking actions that would undermine the system, Governor Jindal summarily fired him.

We now have a premier public health insurance department for state workers that offers affordable premiums and industry-acceptable reimbursements to health care providers. This took a lot of talent. Mr. Teague negotiated with providers who previously were not interested in doing business with OGB. He promised them big changes in service and negotiated better discounts from them at the same time.

While at its worst, most hospitals and doctors did not want to accept the plan. But, at the last board meeting back in September it was reported that every hospital in Louisiana except one now accepts the plan as do most doctors and other providers.

Better discounts and other efficiencies of scale were building increased cash balances. At the final meeting of the last fiscal year the board had a motion on the table to reduce premiums which would have helped with the cost to the state during this fiscal crisis. That motion was met with a substitute motion to maintain rates until we knew how things would shake out with efforts by the administration to take the fund balance to fill a gaping hole in the state budget. The OGB monies are constitutionally protected from being raided as so many other department budgets were being raided at the time.

In the face of the board action, Governor Jindal announced a 5.6% increase in premiums effective July 1st of last year. This action was not only unnecessary but put an additional strain on the already stressed state general fund as the state pays on average 75 percent of the premium cost.

At the same time, it was announced that deductibles would hold over until January 1, 2012, with the effect of drawing down the balance of the cash reserves, placating the complaints of members who could ill-afford more deductions coming from their diminishing pay checks. But this was all part of the governor’s overall plan.

Again for January 1, 2012, the Governor announced and implemented another premium increase of 5.5 percent. Remember, we were in a position to reduce premiums when the plan to raid OGB was put together.

Speaking of transparency, it was indeed very clear what the plan was. By implementing the unnecessary increases in premiums, further increases would be less of a shock to the members and you who must somehow balance the state budget. Experts are telling us that the private insurance company will have to ease in another increase of roughly 10 percent to meet the needs of executive compensation, marketing, stockholder dividends, profit, taxes and other expenses we don’t currently have at the not-for-profit OGB.

Our own actuary gave a figure of $97 million in additional costs to the taxpayer for the July 1 premium increase, coupled with the member deductible holiday through the calendar year. Since that time, there has been another unnecessary premium increase to the taxpayer and the members.

This privatization will be very costly to the taxpayers of Louisiana, but then we get to fire 177 rank-and-file state workers to counter the hiring of former chief of staff Teepell’s family members and all of the politically-connected, deposed elected officials over the last four weeks, most at six figure salaries.

You only need to follow the dollars to understand why the Governor wants this to happen. Thank you for your attention.