In asking for a thorough investigation of the amendment that was slipped on Senate Bill 294 on the final day of the legislative session, Kennedy said his main concern was with New York bond rating agencies, though he also questioned the fairness of the amendment’s applying only to Edmonson and one other Master Trooper from Houma.
“I was in New York when this story first broke (LouisianaVoice ran the first story about the amendment last Friday) and we had discussions about the $19 billion unfunded accrued liability (UAL) of the state’s four retirement systems,” he said. “These rating agencies read our newspapers and our blogs and they know more about Louisiana than we do.”
As State Treasurer, Kennedy sits on some 30 different state boards, including the State Police Retirement System Board but he said his interest in attending Wednesday’s meeting was in protecting the state’s bond rating. “If our rating goes down, our interest rates go up,” he said. “I spent 12 or 13 hours with them and they are worried about our Medicaid situation, our use of non-recurring revenue and our retirement systems’ UAL.”
Another state official, an attorney, told LouisianaVoice that he had another constitutional violation to add to C.B. Forgotston’s list of five constitutional violations of the amendment: “The amendment impedes an existing contract,” he said. Col. Edmonson entered into a binding contract when he entered DROP and that is irrevocable. We have had a constant parade of state employees who wanted out of DROP and every single one has been denied.”
Kennedy said there are two sides to every story. “I’d like to talk to Charles Hall (of Hall Actuaries, which did a study for the legislature earlier this year). I’d like Sen. Jean-Paul Morrell (D-New Orleans) who authored the original bill to come speak to us.”
Kennedy said the two men benefitting from the amendment also have a right to address the board. “They have every right to due process,” he said.
Other answers he said he would like include:
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- How many people are impacted by this amendment?
- Who are they? (The identities of the beneficiaries of the amendment);
- Who sponsored the amendment in committee? (so they might come before the board and explain their motives);
- What is the total cost of the amendment? (so he can report back to the rating agencies);
- What are the remedies, litigation or legislative relief, allege the bill is illegal or simply refuse to comply?
- What are the legalities of the bill? (Can an amendment be done dealing with retirement issues that is supposed to be advertised?);
- Has special treatment been given?
“Years ago, we had anywhere from 10 to 15 bills introduced each year to give special treatment to one, two or three individuals without appropriating any money,” he said. It was wrong then and it’s wrong now.
“Gov. (Mike) Foster finally said ‘Enough, we will do this no more.’ And now here we are again. The rating agencies are appalled at that.”
Kennedy, in a private interview after the meeting, said he was concerned with everyone being treated equally. “I don’t believe in special treatment for those who have the political power or (who) know the right people. I think it’s stupid economically and it is what has contributed to the UAL. This amendment has implications far beyond the two men affected. I want to see how much it would cost to give everyone the same treatment.
“We have the sixth worst-funded retirement systems in America and the rating agencies have told us over the past two years to get our business straight or they will downgrade us. If that happens, we’ll be paying higher interest on our bonded indebtedness.”
Kennedy saved his harshest criticism for the legislature when he said, “Someone didn’t read this bill or they’re not being candid. They should be doing these amendments in a more transparent way. These last minute amendments are done and no one know what they’re adding and suddenly, it’s an up or down vote.
Kennedy asked LSPRS Executive Director Irwin Felps, Jr. if the board could meet before the next scheduled meeting on the third Wednesday of September. “It’s important that we address this issue,” he said.
“There’s no excuse for this. This amendment didn’t just fall from heaven. Somebody has a lot of explaining to do and if I find preferential treatment, I will vote to rescind the amendment.”
Kennedy’s claim of a lack of transparency and the sudden “up or down vote” was illustrated when Rep. Jeff Arnold (D-New Orleans) explained the amendment on the floor of the House during the final hectic hours when lawmakers were hurrying to wrap up business:
“The new language to the bill applies to those paying more into the system since 2009 for benefits they cannot use,” he said. “It makes people whole but does not give them a larger benefit.”
Don’t believe us? Watch and listen for yourself. Go to this link and scroll down to “June 2, 2014,” and then to “House Floor,” and then click on “Part 1” and move the curser to the right until you get to 2 hours, 53 minutes. There you will be able to watch and hear Arnold explain the new legislation in about 15 seconds.
Then you can decide for yourself if the amendment’s sponsors were being completely up front with their colleagues—and with Louisiana taxpayers.