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“The report is privileged as part of the deliberative process and is exempt from disclosure.”

–Division of Administration attorney Paul Holmes, in his May 27 reponse to a public records request by LouisianaVoice in which he invoked the administration’s catch-all shield behind which it conceals information from the public.

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State employees who were blindsided by Gov. Jindal’s announcement last week of proposed sweeping changes to the state’s retirement system have only themselves to blame; they simply haven’t been paying attention.

It’s been a long time coming and while the jury is still out on what will and what won’t be approved in the upcoming legislative session or what is or is not fair to longtime state employees is irrelevant at this point. There is a much larger problem to be addressed: a problem of nearly $6.5 billion in unfunded liabilities for the state employee retirement system, to be precise.

This is an issue that has been punted repeatedly by legislators past and present who were unwilling to make a hard decision and now change is no longer on the far horizon: it is upon us and it is inevitable.

As far back as 1989 a constitutional amendment was passed by the legislature and approved by voters to amortize the state’s unfunded accrued liability (UAL) payoff over 40 years on a level payment plan (adjusted for inflation and payroll growth projections).

That amendment, however, had one fatal flaw: it allowed the legislature to change the payment schedule by statute. One may as well have turned a fox loose in the henhouse or a child in a candy store.

The latter may be more appropriate since the legislature has a greater propensity to act like the adolescent when the state coffers are rife with revenue. Lawmakers wasted no time in tinkering with the schedule in order that they might fund local projects in the annual budget. The folks back home, after all, don’t care about what’s going in Baton Rouge as long as they get their community centers and golf courses funded.

Now, as we approach the 2029 deadline imposed by that amendment, the state is staring down the barrel of huge balloon payments.

Whether one likes Jindal or not, the problem with the state’s UAL for the various pensions for employees, teachers, school employees and police is no more his doing than the state’s next governor, whoever that may be.

But neither was the problem caused by state workers who now are being called upon to change their retirement plans in mid-stream to accommodate those legislators who in past years shirked their fiscal responsibilities in order to more easily facilitate their own political careers. It is patently unfair to ask rank and file state employees to pay the penalty for past legislative moral malfeasance.

That’s not to say that Jindal has the right solutions in his proposals; we have no way of knowing that at this point. It’s just that it is now his problem to wrestle with in the upcoming legislative session.

It is not likely that Jindal or his staff conceived of these reforms independently.

The American Legislative Exchange Council (ALEC), a conservative coalition of state legislatures, includes the reform of state pensions as one of its “Tools to Control Costs and Improve Government Efficiency” on its state budget reform web page: http://www.alec.org/publications/state-budget-reform-toolkit/.

Other tools specifically recommended by ALEC include the restructuring of state retiree health care plans, delaying “automatic” pay increases, adopting a state hiring freeze, embracing the expanded use of privatization and competitive contracting, establishing a state privatization and efficiency council and selling state assets.

Any of those sound vaguely familiar?

Several corporate members of ALEC have been identified as major contributors to Jindal’s political campaigns.

Of the 126 bills already pre-filed in the House and Senate as of Tuesday, 84, or fully two-thirds deal in some fashion or another with retirement. The breakdown shows that 36 retirement bills have been filed in the House and 48 in the Senate.

Some of the bills in both chambers are different versions of the same proposals, so some of the duplicate bills will be withdrawn before consideration.

Many of those deal with local clerks of court, assessors, sheriffs and municipal employees but just as many—or more—deal specifically with state employees.

Jindal said for now he is addressing only state employees and not teachers, school employees or state police.

Many of his proposals break long-standing promises made to state employees relative to retirement benefits and eligibility.

HB 53 by Rep. Kevin Pearson (R-Slidell), for example, stipulates that employees hired prior to June 30, 2006 may retire after 10 years and upon attaining age 67. Those hired after June 30, 2006 may retire after five years and attaining age 67.

The present law allows a state worker to retire after 10 years at age 60.

HB 56, also by Pearson, chairman of the House Retirement Committee, would increase employees’ retirement contributions from 7.5 percent to 10.5 percent for those employed on or before June 30, 2006 and from 8 percent to 11 percent for those employed on or after July 1, 2006.

But perhaps the bill that would sting the worst is SB 17 and SB 26, both by freshman Sen. Barrow Peacock (R-Bossier City). Each of those bills would change state pensions from a defined benefit to a defined contribution.

That means that instead of employees being guaranteed a set pension based on the current formula of three-year average salary times 2.5 percent times years of service, employees would contribute a predetermined amount to retirement with no guarantee of benefits. Such a program, which would react to market conditions, is similar to the 401K plan common in the private sector.

One bill, HB 55 by Pearson, would alter the formula for computing retirement from a three-year average salary to a five-year average, thus reducing in theory, at least, the employee’s monthly retirement check.

HB 61, also by Pearson, would require a one-time, lump-sum payment to employees with five or more years’ credit upon retirement. The employee may opt to take the lump sum or leave his account balance with the system and draw an annuity.

Because state employees do not contribute to, nor do they qualify for, social security, their retirement income would hinge solely on the uncertainty of their state retirement.

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A politically astute friend who shall remain nameless has been quick to challenge last week’s suggestion that Gov. Bobby Jindal may have lost his Midas touch. He described, in so many words, the notion that Jindal’s luck may have been pushed to the breaking point as about as realistic as Newt Gingrich’s chances of capturing the GOP presidential nomination.

“Don’t believe it,” our friend, longtime political observer, cautioned. “The governor got exactly what he wanted with the committee assignments in the House and Senate. Those (who) dared criticize him in the past have been removed from the money committees and banished to Labor or cultural Affairs and other backwater committees.”

Strong words indeed. But he wasn’t finished. “He has a hand-picked Education Committee in both chambers to do his bidding, not to mention the rubber-stamp BESE. And speaking of education, the governor finally announced his agenda for the 2012 session.”

He went on to say of that education plan released by Jindal on Jan. 17 that if people read it carefully and also read between the lines, they will understand that it is nothing more than a blueprint “to destroy public education in Louisiana.”

“If he can pull off even half of what he is proposing for education, it will be the most sweeping changes in the history of public education in Louisiana,” he said. Note that he never said that he thinks the plan is good.

“Teachers are going to be furious,” he said. His (Jindal’s) strategy to drive a wedge between superintendents, principals and school boards is ingenious. Divide and conquer!

“I’m not sure the public will see this plan for what it is: to destroy public education in this state and replace (it) with state-controlled charter schools and the like. I am not in favor of that but I’d say he has set himself up for a lot of success.

“The main problem is the teachers unions are their own worst enemies and I’m not sure they understand what approach they need to take to counteract the governor. If they set themselves up as simply opposed to any change just to be opposed to change, the governor will eat them alive. The public realizes that the education system is broken and they want change. Jindal will use that to get what he wants.”

Never one to be labeled as a one-trick pony, our friend dug the knife in a little deeper with his observations about the flare-up between Jindal, aka Booby Jihad, and Attorney General Buddy Caldwell, a flare-up that sputtered and died a quick death once Caldwell got a quick lesson in political realities.

Caldwell had earlier had the temerity to challenge Jindal’s decision to pay attorneys representing the state in the BP Gulf spill litigation a percentage of any recovery as opposed to an hourly rate favored by Caldwell.

Caldwell, supposedly the state’s top legal expert (excluding judges, who always have the final say), accused Jindal of interfering with his (Caldwell’s) handling of the case. Jindal further outraged Caldwell by signing off on a legal document in which Jindal agreed not to appeal any awards made for legal fees, and Caldwell, who doubles as a part time Elvis impersonator, said so.

You’ll just have to forgive us here, but Jindal thought Caldwell’s Suspicious Mind was Too Much and got All Shook Up. The governor, through an intermediary, sent Caldwell the message that it was all about the Money Honey and by the time it was over, Caldwell was singing Don’t Be Cruel.

Okay, that’s enough of that. In reality, our friend said, “Caldwell forgot a fundamental rule of politics: he who pays the fiddler calls the dance. Caldwell (and most of the other statewide elected officials) thinks he can do what he wants because is independently elected. But he forgot that the governor controls the purse strings (read: agency budget allocations). Oops!’”

Pension Plan Changes Proposed

On Wednesday of this week, Jindal released his plan to overhaul Louisiana’s state employee pension system that would increase retirement contributions for about 54,000 current employees while reducing benefits and extending the eligible retirement age for many of them.

Jindal also wants to move away from the present system for new hires, doing away with the monthly pension check to a lump sum retirement payment based on contributions and earnings. This would abolish the present defined benefits system in favor of a defined contribution one whereby employees no longer would be guaranteed a set monthly retirement payment but instead would make a guaranteed contribution to the pension system with no guarantee of return, much like a 401K program.

Oddly, Jindal’s proposal would apply only to the Louisiana State Employees Retirement System (LASERS), which has an unfunded liability of $6.45 billion. He exempts the state’s other three systems—teachers, school employees and state police. The Teachers Retirement System alone has a debt of $10.8 billion.

He said he prefers to leave teachers and school employees alone for the time being because of proposed educational changes on the horizon.

He said legislation will be pre-filed this week for consideration during the upcoming 85-day legislative session that opens on March 12.

Education Fight Looms

In his press conference last week, Jindal chose to unveil his education plans at the annual meeting of the Louisiana Association of Business and Industry (LABI), a virtual slap in the face to teachers, the group that he should have been addressing. But a virtual slap is probably appropriate considering his penchant for charter schools and virtual schools.

Just what is a virtual school anyway? Does it provide a virtual education? Do graduates get virtual jobs? Do they pay virtual taxes and give virtual campaign contributions?

Jindal, as is his custom, continues to paint all teachers with the same broad brush, a tactic that is patently unfair and grossly inaccurate. He talks about failing schools and poor teachers and giving students—the better students, to be sure—into better schools (read: charters).

To say a student fails because of a poor teacher is not only callous, but stupid. For example, in a class of say, 25 students, there are 23 students from poor economic backgrounds. Still, six of these students excel in classroom work and make top grades. Nineteen make Cs, Ds, and Fs. This same scenario is repeated throughout the school so the school is a failing school and the teachers are labeled as poor teachers and fired under Jindal’s plan.

But how does one explain those six students in that class who excel? Did they make top grades without the benefit of good teaching? No, Mr. Jindal, they did not, any more than the nineteen did poorly because of bad teaching. All 25 students were exposed to the same classroom material, had access to the same textbooks and took the same tests.

In my own school, Ruston High School, I sat in the same classroom with students who slept during class, never turned in homework assignments, never participated in classroom discussions, and consistently made D’s and F’s on tests. I also sat in the same classroom with Joel Tellinghusen who would go on to pioneer laser surgery, and Bill Higgs who would one day become an acclaimed heart surgeon in Mobile, Alabama. A couple of years ahead of me was Patricia Wells who would go on to a stellar career as a soprano with the Metropolitan Opera.

So, were the teachers at Ruston High School graded on the basis of those who did poorly or on the basis of the Joel Tellinghusens, Bill Higgs and Pat Wells? We will never know because that absurd method of grading schools wasn’t around then. They just let teachers teach. Wow. What a concept.

When kids come from poor economic backgrounds and parents take little or no interest in the children’s educational progress, kids generally reflect those demographics with poor grades. Motivated students listen to teachers, read assignments, do homework, and do well on tests. Period.

Yet, we have an outfit called Educate Now in this state that lists schools in New Orleans only by whether or not they are Recovery School District (RSD) schools or voucher-accepting private schools. The organization then lists the percentage of students who score above basic on English and math in grades 3-5.

That’s it. There is no attempt to take into account students’ prior achievement, no consideration of demographic variables like economic background, and no consideration of whether or not students are eligible for vouchers only if they had been attending a failing public school.

In short, there is no statistical analysis whatsoever—a pitiful method of judging the merit of voucher schools.

“The governor wants the new untested teacher evaluation program to form the basis for firing or demoting large numbers of teachers based on student test scores,” said Michael Deshotels, a retired educator.

“Never have I seen such a misguided and wrong-headed attempt to implement change in our educational system as was announced by Gov. Jindal on Tuesday,” he said. “If you study the governor’s proposals you can only come to the conclusion that he believes that the teaching profession in Louisiana is rife with incompetent or lazy teachers and administrators, and that if we simply fire and replace them our students will magically start doing much better on the state tests. Almost everything in the governor’s plan is based on this incorrect assumption,” he said.

Ron Clark, a teacher who started his own academy in Atlanta, had an interesting perspective on teaching and so-called failing schools: “It’s usually the best teachers who are giving the lowest grades because they are raising expectations. The truth is, a lot of times it’s the bad teachers who give the easiest grades because they know by giving good grades everyone will leave them alone. Parents will say, ‘My child has a great teacher! He made all A’s this year’ and the teacher (parents) are complaining about is actually the one that is providing the best education.”

The problem with Jindal’s plan for education, says Deshotels, is that “it is based upon an untested value-added model similar to one that is already failing in Tennessee and New York. In Louisiana the two chief architects of the new value-added model have resigned from their roles in the program, passing this potential monster on to other staff,” he added.

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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.

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As promised, we have information on the rehire of two other retired employees of Treasury Secretary John Kennedy but no sooner than we made that promise than we received information on two additional such employees who work for Kennedy.

We have made public record requests on the latest two and will post those upon receipt of the needed information.

As something of an aside, perhaps we should mention that while those at Treasury have been extremely cooperative in fulfilling our requests for information, the same cannot be said for the Division of Administration (DOA).

We have information on good authority that two retired DOA employees have been rehired but when we requested information on those individuals we got the old bureaucratic shuffle at which DOA has become so adept.

DOA has been less than cooperative, in fact downright hostile.

David Boggs of the DOA Office of General Counsel responded to our request with a snippy email in which he said, “The Public Records Law does not place an affirmative duty upon the custodian to provide answers to written questions. The Public Records Law requires us to produce records already in existence, not answer questions or generate new records in response to a request.”

The only problem with that response is we never requested that DOA “generate new records.” Accordingly, we re-phrased our request in statement form as opposed to asking questions (Apparently Mr. Boggs is not a fan of Jeopardy!).

Editor’s update: Subsequent to posting the above paragraphs relative to Mr. David Boggs, we received another email from him relative to one of our requests. You will recall he responded to our last request in a somewhat condescending manner so we rephrased our request.

So how did he respond this time? Here is his response:

“We have received your email requesting records related to the employment records of Ray Stockstill. The proper custodian of records for the Division of Administration is the Commissioner of Administration, Paul W. Rainwater. Please address all future requests to him by any of the following methods:

By email: doacommissioner@la.gov
By fax: (225) 342-1057
By US Mail: P.O. Box 94095, Baton Rouge, LA 70804-9095″

He did say, however, that DOA would respond to our request. We’ll see.

In the meantime, if any of our readers have any requests for public records, you have Commissioner Rainwater’s contact information.

Always preface all request with this wording:

Pursuant to the Public Records Act of Louisiana, R.S. 44:1 et seq., I respectfully request the following information:

Here is the part of the law that readers probably should know by heart before seeking information.

A custodian who determines a record is not public, must provide written reasons, including the legal basis, within three working days. If a requester is denied a public record by a custodian or if five business days have passed since the initial request and the custodian has not responded, the requester may file a civil suit to enforce his right to access. the custodian bears the burden of proving that the record is not subject to disclosure because of either privacy rights or a specific exemption. The law requires the courts to act expeditiously in such suits and to render a decision “as soon as practicable.”

If the requester prevails in the suit, the court will award reasonable attorney’s fees and other costs. If the requester partially prevails, the court may, at its discretion, award reasonable attorney’s fees or an appropriate portion thereof. (The custodian and the public body may each be held liable for the payment of the requester’s attorney’s fees and other costs of litigation; however, the custodian cannot be held personally liable for these fees and costs if he acted on advice from a lawyer representing the public body.)

The court may also award the requester civil penalties of up to $100 for each day the custodian arbitrarily failed to give a written explanation of the reasons for denying the request. In addition, if the court finds that the custodian arbitrarily or capriciously withheld a public record, it may award actual damages proven by the requester to have resulted from the custodian’s action. (The custodian may be held personally liable for the actual damages unless his denial of the request was based on advice from a lawyer representing the public body.)

In addition to civil remedies, the law also provides criminal penalties. Anyone with custody or control of a public record who violates the law or hinders the inspection of a public record will be fined $100 to $1,000, or imprisoned for one to six months upon first conviction. For a subsequent conviction, the penalty is a fine of $250 to $2,000 or imprisonment from two to six months, or both.

We will advise as to whether or not DOA continues to withhold public information in violation of state law. In the meantime, let’s examine the information we do have as a result of previous requests—the rehire of retired Treasury employees Jama L. Scivicque and Gary K. Hall to unclassified (non-civil service) positions.

Hall retired as a $114,275.20 per year State Treasurer Fiscal Officer on July 22, 2011 with an annual pension of $64,768.92.

Five days after his retirement, on July 27, he was rehired as a “special projects officer” at $54.94 per hour, the same rate as his hourly pay at the time of his retirement.

Because he was re-hired as a part-time employee, however, he was scheduled to work a maximum of 32 hours per week which gave him an annualized salary of $91,420.16.

Scivicque was a State Treasury Fiscal Manager earning $107,078.40 per year when she also retired on July 22 with a yearly pension of $62,161.08. She was re-hired four days later, on July 26, at an hourly rate of $51.48 on the same part-time, 32-hours-per-week basis as Hall, giving her an annualized salary of $85,662.72.

Stephen Stark, deputy general counsel for the Louisiana State Employees’ Retirement System (LASERS), noted that R.S. 11:416 provides that if a state employee chooses to continue receiving retirement benefits while re-employed, “the employee is limited by annual earnings, regardless of whether those earnings come from full-time or part-time employment. If their earnings exceed 50 percent of their benefit for that year, the law calls for a reduction of their benefits henceforth to recover the excess earnings,” he said.

Under that law Scivicque could apparently earn up to $31,000 per year without impacting her retirement. Likewise, Hall could earn slightly more than $32,000 without losing retirement benefits.

In the cases of Hall and Scivicque, First Assistant State Treasurer Ron Henson, Kennedy’s second in command, signed off on their offers of employment on Aug. 8, in effect approving their employment retroactively.

“The State Treasury Fiscal Officer and State Treasury Fiscal Manager, who have a combined service of 65 years with Treasury, are retiring effective July 24, 2011,” Henson said in his Request for Unclassified Authority. His July 24 date did not square with Employee Notification Forms which showed that both employees actually retired two days earlier. “Their comprehensive knowledge of statewide fiscal control functions is invaluable to the State operations, particularly as it relates to the 45-day close, the fiscal year close and revenue sharing allocation processes, all of which occur once each fiscal year,” he said. “Because of the complexity and uniqueness associated with the three processes, it could place the state at great risk not to provide for knowledge transfer during the preparation phase and as each process actually occurs.”

In describing their duties, Henson said the positions were needed “to provide assistance to new management in the Office of State Depository Control and to allow a transition period for achieving successful results during the 45-day close in mid-August, the final 2010-11 fiscal year close in late September, and the state’s revenue sharing allocation for FY 2011-12. It would also ensure the accomplishment of essential knowledge transfer of critical state control functions without any disruption in the state’s fiscal services.”

Besides a penchant for run-on sentences, it seems that Henson also has a flair for bureaucratic gooney-babble. The justification for re-hiring these two retirees is just about as vague, meaningless and bureaucratese-filled as it is outrageous to expect a state agency to be so unprepared for the retirement of first one, then three, and now, we learn, five of its employees.

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