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House delays consideration of $25M retirement hike

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Posted: Jun 2, 2011 4:30 PM
Source: Associated Press

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Topics: baton rouge, governor, bobby jindal, retirement, costs, wbrz, louisiana

BATON ROUGE - Gov. Bobby Jindal's proposal to raise state employee retirement costs to fill budget gaps has stalled in the House amid questions about whether the bill should be considered a payroll tax hike on workers.

Republican Rep. Kirk Talbot, the sponsor of the measure, scrapped a House debate planned on the proposal for Thursday. He didn't set a date for rescheduling that debate.

"There's some controversy over whether it's a tax, and we're trying to straighten that out. I don't believe it is," said Talbot, R-River Ridge.

The bill would increase the percentage of pay that workers in the Louisiana State Employees' Retirement System contribute to retirement by 3 percent. It wouldn't apply to employees in hazardous lines of duty, like prison guards.

Included in Jindal's 2011-12 budget proposal, the bill would lower employees' take-home pay and give state coffers an extra $25 million a year.

Jindal, who has railed against tax increases, has steadfastly argued that a boost in state employee retirement costs isn't a tax, even though workers would be required to give more of their paychecks to retirement.

House Speaker Jim Tucker has disagreed with the governor, calling the proposal a payroll tax.

Declaring it a tax would likely doom the retirement cost hike in the House, where legislative leaders have opposed any attempts to raise taxes. Tucker, R-Terrytown, has said the retirement proposal will have difficulty getting support in the House, and lawmakers in the chamber refused to include money from the retirement increase in the House-backed budget.

Supporters say that the state's share of retirement costs has grown over the past 20 years and that employees should contribute more to their benefits.

Critics say state employees shouldn't be forced to take pay cuts to solve state budget problems. Retirement system officials have questioned the constitutionality of the proposal.

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