Louisiana House Bill HB384

Louisiana 2011 Regular Session

• Introduced: 4/25/11
• Refer: 4/25/11
• Refer: 6/7/11
• Refer: 6/8/11
• Engrossed: 6/15/11
• Report Pass: 6/19/11
• Enrolled: 6/23/11
• Chaptered: 7/13/11
• Passed: 7/13/11

Caption

(Constitutional Amendment) Provides for a minimum of 10% of nonrecurring revenue be applied toward reducing the balance of the unfunded accrued liability of the state retirement systems (EN SEE FISC NOTE SD RV See Note)

Impact

The proposed amendment will have a significant impact on the expenditure of state funds, particularly concerning how nonrecurring revenue is utilized. By requiring a portion of revenue to be directed towards reducing unfunded liabilities, the bill aims to improve the financial health of public pension funds. This statute might restrict the legislature's ability to utilize surplus nonrecurring revenue for other priorities, such as public services or infrastructure projects, as a portion will be earmarked specifically for retirement liabilities.

Summary

House Bill 384 is a constitutional amendment aimed at addressing the unfunded accrued liabilities of the state retirement systems in Louisiana. The bill mandates that a minimum of five percent of nonrecurring revenue be allocated to the Louisiana State Employees' Retirement System and the Teachers' Retirement System of Louisiana for Fiscal Years 2013-2015. From Fiscal Year 2015-2016 onwards, this allocation will increase to a minimum of ten percent. The intent of the bill is to ensure that these retirement systems are adequately funded to meet their obligations to retirees without compromising budgetary flexibility.

Sentiment

The sentiment around HB 384 appears to be cautiously optimistic among supporters, who argue that addressing unfunded liabilities is crucial for the state's long-term fiscal stability. On the other hand, there is concern among opponents that such mandates could lead to fiscal constraints, limiting the state's ability to allocate funds for immediate public needs. Overall, the discussions surrounding the bill highlight a balance between ensuring pension security for state workers and maintaining operational flexibility within the state budget.

Contention

One notable point of contention surrounding HB 384 is the concern regarding the prioritization of pension funding at the potential expense of other essential state services. Critics argue that while addressing unfunded liabilities is necessary, the mandatory allocation could detract from the funding available for education, healthcare, and infrastructure. The debate revolves around how best to manage the state's priorities without compromising the financial commitments made to its public employees.