BATON ROUGE (CNS)—With the outcome of this year’s gubernatorial election all but final heading into the last days of the 2011 campaign, it might be good to look ahead at what’s in store as Gov. Bobby Jindal prepares for his second term.
He has already partially unveiled his agenda for the next four years to trusted top staff. And not all staffers—including some cabinet members—are within his circle of trust.
If you think he was a bit ambitious with his agenda to reduce the role of government during his first term, you might want to find something to hold onto during the next four years. It’s going to be quite a ride. That’s provided, of course, he sticks around that long. There’s no guarantee of that because he does harbor national ambitions despite his comforting assurances to the contrary.
Details of Jindal’s plans for the coming four years remain sketchy but there are a few moves that can be predicted with relative ease. Others might be considered improbable if one chooses not to observe what conservative Republican administrations have managed to do in other states.
There is the privatization of the Office of Group Benefits (OGB), of course. That’s a no-brainer. It’s an emotional issue and those emotions are not likely to subside as the administration steps up its efforts to sell off what is arguably the most efficient agency in state government. But Jindal and his Commissioner of Administration Paul Rainwater have already sent signals that privatization of the agency is high on their bucket list.
Opponents point out that OGB currently has an administrative overhead of about three percent. That is because it is not required that the agency turn a profit nor does OGB pay taxes on premiums. A private concern would require an administrative cost of about 15 percent to allow for profits and tax liabilities. That would translate to a substantial premium increase for state employees and retirees.
OGB currently has a surplus of about $500 million but those funds are for the payment of benefits only and are off-limits to the administration. If OGB is sold for somewhere in the neighborhood of $150 million to $200 million, however, that money would go straight into the state’s general fund and that’s money Jindal wants desperately.
A recent development is more than a little telling on this issue. OGB has proposed a rate increase of about three percent but the administration has insisted on at least a five percent bump. A bigger premium increase would allow the $500 million surplus to remain intact, thus making the agency far more attractive to potential buyers.
Another nagging issue that Jindal is likely to address is the cost of the various state retirement plans, which currently are saddling the state with an unfunded liability of about $18 billion.
State employees presently have a defined benefit plan as opposed to a defined contribution plan. Look for the administration to take a long, hard look at changing that.
Defined benefits mean that employees pay premiums with the knowledge that their benefits are locked in. That benefit is computed by multiplying the average of an employee’s three highest years of earnings by 2.5 percent by the number of years of service. An employee who earned an average of $60,000 in his three best years over a 30-year career would multiply $60,000 by 2.5 percent, which is comes to $1500. That $1500 is then multiplied by the number of years of service (30) which computes to an annual pension of $45,000.
Under a defined contribution plan, contributions would be set and the money would be invested in much the same way as a 401(K) plan works. There would be no guarantee of benefits because that would depend on market fluctuations. That’s not a change desired by state employees after the recent Wall Street crisis.
State employee sentiments aside, one state legislator, Sen. D.A. “Butch” Gautreaux (D-Morgan City), outgoing chairman of the Senate Retirement Committee, pointed out that should the state convert to a defined contribution system, the state would then be required to begin paying Social Security premiums on state employees. State employees do not presently participate in Social Security.
“Going to a defined contribution system would not save the state any money,” Gautreaux said.
Jindal is almost certain to renew his efforts to privatize several state prisons. He tried earlier this year but backed off those efforts in the face of vocal opposition from prison employees, legislators, and local citizens. With no concerns about being elected to a third term, he is likely to make a harder push next year in an effort to pull in a few million more into the general fund.
Remember Rep. John Schroder (R-Abita Springs)? He’s the legislator who, in 2010, introduced four bills designed to abolish Civil Service and the Civil Service Commission and to give the legislator authority to decide which state employees would receive merit raises.
Those efforts failed and he did not renew his efforts this year, probably because it’s an election year. Those efforts are quite likely to resurface in next year’s legislative session as are attempts by Rep. John LaBruzzo (R-Metairie) to force welfare recipients to undergo drug testing. Previous attempts have never made it out of committee.
Though both measures by Schroder and LaBruzzo have gotten nowhere, consider Gov. Scott Walker who has effectively defanged the state employee union in Wisconsin. And in Florida, Gov. Rick Scott has signed into a law that requires adult welfare recipients to undergo drug screening.
Since day one, Jindal has worked nearly as hard on education reform as he has on political fundraising.
His penchant for replacing public schools with charter schools has incurred the wrath of public school teachers who are forced to accept all comers, to take the bad students with the good. Jindal’s charter schools, they say, have operated under the guise of open admissions when in reality, practicing selective admissions.
The recent school grades released by the State Department of Education would seem to bear that out. All but one of the top performing schools (24 of 25) were schools with selective admissions while 19 of the lowest 25 were alternative schools—those schools into which the poorest performing students are shunted.
Jindal’s efforts to privatize the state’s Medicaid program are likely to continue unabated. The Department of Health and Hospitals already has approved a $300 million contract to CNSI to implement the state’s Medicaid Management Information System. The contract raised eyebrows in the legislature because DHH Secretary Bruce Greenstein once worked for CNSI and Greenstein attempted to conceal from a legislative committee the identity of the contract winner.
With only token opposition in Saturday’s election, the only obstacle for Jindal’s agenda is the legislature itself. But with a solid Republican majority in both the House and Senate, any opposition there is likely to no less token.
Louisiana Voice 