Don’t say we didn’t warn you.
As recently as Jan. 31—less than a week ago—we told you that Gov. Bobby Jindal is following the playbook of the American Legislative Exchange Council (ALEC) almost to the letter.
That playbook includes a section entitled “Tools to Control Costs and Improve Government Efficiency.” Among the “tools” it recommended were:
• Adopt a state hiring freeze;
• Reform state pensions;
• Delay automatic pay increases (we wondered where legislators came up with the term “automatic” in freezing merit increases a couple of years back);
• Embrace the expanded use of privatization and competitive contracting.
Each of these has already been done or is in the process of being done.
Next Thursday, the administration will present the governor’s Executive Budget for Fiscal Year 2012-2013. Included in the budget will be the proposed sale of the Office of Group Benefits (OGB) for $189 million, to become effective Jan. 1, 2013.
The committee meeting is scheduled to be held at 9:30 a.m. in House Committee Room 5.
The $189 million apparently is the price tag derived by Morgan Keegan, the Memphis banking firm that stands to reap a $750,000 bonus over and above the $150,000 for assessing OGB’s value if it is successful in negotiating the OGB sale at the $189 million price.
Morgan Keegan was itself only recently sold after being fined $210 million nearly two years ago by the Securities and Exchange Commission for misrepresenting critical information to investors.
Whoever ultimately purchases OGB will take with them the $500 million surplus now carried on the OGB books which the new operators will use to pay claims.
LouisianaVoice has also learned that once the sale of OGB is successfully negotiated and the agency is taken over by private industry, premiums will rise by approximately 10 percent.
There are other proposed changes coming that we can tell you about next week.
We can tell you this much, though: It ain’t gonna be pretty.
Louisiana Voice 
What a sleeze bag! I hope all the retirees are there to speak up for those who can’t!!!!!!!!!!!!!!!!
Morgan Keegan is just nuts. A buyer of the OGB Plan for a pittance of $189 million gets a $500 million “Kitty” and a ready-made group of 54,000 plan participants. Think of the on-going revenue that the buyer will reap from having the purchasing power of a 54,000 group. The profits to the plan provider will be astronomical. Whatever happened to letting bids to responsible plan providers? Why do we need Morgan Keegan? The State Treasurer, department of Revenue, The State Auditor, and the Attorney General’s office have capable accountants and actuaries to judge the fairness of the bids received. Oh, I forgot. Jindal and Co. think ALL state employees are incompetent and only “private” practioners know what’s going on.
If the legislators are so stupid as to approve this sale without a third party review of Morgan Keegan’s calculations, then plan participants should try and legally delay the proposed sale under the banner of lack of fiduciary responsibility by jindal and the Legislature.
How can Louisiana year after year make such bonehead decisions? No wonder we are such a laughing stock.
He could lay off 50,000 workers and it won’t change anything fiscally. He won’t raise taxes on tobacco and alcohol or institute stricter litter fines, but is more than willing to flash that smug face for the dumb public in this state who has his back and who obviously aren’t paying attention.
It is clear that Governor Jindal is the most powerful governor in recent history. Edwin Edwards was very strong early on, had much greater personal charisma, and could have transformed the state had he been interested in doing so. Jindal IS transforming the state, for better or worse, and the opinions of those not on his team are simply ignored.
Of all his actions, this one makes the least sense. The rationale has never been clearly put forth. Is it being done to simply prove he can do anything he wants to do? Just saying the state shouldn’t be in this business isn’t enough. If that is the only reason, it is pure ideology. Is it being done to prop up the budget? If so, let’s see if the Executive Budget explains how it does so in the short and long runs.
The administration has done a much better job explaining the actions they propose on dealing with the retirement systems UAL, but it appears they conveniently left out the huge amounts of savings that would be directed to the general fund for use in the budget rather than to the UAL itself. In the case of the group benefits program, they seem to have left almost everything out by way of explanation. It just doesn’t make sense for anybody except Morgan Keegan and the ultimate purchaser so far.
Follow the campaign contributions money.
2angels – Why is it state workers do not feel like they can speak up? Of course, they can!
Also, their explanation behind the singling out of 54,000 state workers to carry the burden of the retirement debt was not good enough.
The last time i know of a state worker speaking up, was at a civil service hearing, held in 2010, I believe, Jindal had her terminated 3 days later for something she allegedly did in 2005, during the disaster of biblical proportions that was Katrina. We fear retribution because it is a real fear. Another reason that Jindal is a tyrant. He doesn’t really believe in the First Amendment when he is criticized. Mr. Jindal is taxing the families of state workers by not allowing merit raises and now he is going to attack our retirement system. Is it right to work for the state for thirty years with the promise of a specific plan–only to have it changed by Jindal to balance the budget? Is this not a breach of contract?
I would also like to add that those providing state services are becoming more and more demoralized by the actions of this administration. Think state services don’t have an impact on your life? Do you go to hospitals, do you have a family member in a nursing home, do you receive any kind of health care services? Those are all regulated by highly trained medical professionals, working for the state. If Jindal keeps cutting the number of staff providing those services, the facilities will realize the state has no teeth to regulate and they will get away with providing substandard care to the citizens of this state. Think that can’t happen? Think all health care providers are honest? Go look at the number of individuals who have been jailed or fined for providing poor care or billing for services they did not provide. Jindals cuts impact us all.