Provides relative to funding of retirement systems. (6/30/19) (OR SEE ACTUARIAL NOTE APV)
Impact
The financial analysis indicates that the net actuarial costs and fiscal implications resulting from SB 17 will remain zero, implying that the change will not affect the overall benefits promised to current members of the retirement systems. However, since the total taxes owed by New Orleans to these systems will decrease under the new statute, there is a concern that employers participating in these retirement systems may face higher contribution rates to compensate for any lost revenue. Overall, while the bill may alleviate some financial pressures on New Orleans, it could lead to increased costs for employers within these retirement systems.
Summary
Senate Bill 17 aims to modify the funding mechanism for specific retirement systems in Louisiana concerning contributions from ad valorem taxes collected in the city of New Orleans. The bill proposes that taxes earmarked for specific purposes, as stated in the propositions authorizing them, will not be included in the calculation of aggregate taxes for the determination of remittances due to retirement systems such as the Assessors' Retirement Fund, Clerks' of Court Retirement and Relief Fund, and others. This change is expected to decrease the amount of ad valorem taxes that the city must remit to these systems, effective from the 2019 actuarial valuation onward.
Sentiment
Discussions around SB 17 reflect a general sentiment that ranges from cautious optimism to concern. Proponents of the bill view it as a necessary adjustment to better reflect localized fiscal realities, allowing for more strategic use of tax revenues dedicated to specific purposes. Conversely, opponents express worries about the potential ramifications for retirement system funding, fearing that it could jeopardize the financial stability of these systems in the long run. The sentiment is nuanced, balancing between fiscal prudence for city management and the security of retiree benefits.
Contention
One major point of contention surrounding SB 17 lies in its potential impact on the financial obligations owed by the city to the various retirement systems. Critics argue that limiting the taxes calculated for remittances could erode the funding available for retiree benefits, thereby placing future pension security at risk. Advocates counter that the bill strategically clarifies the boundaries for tax revenues which can be allocated for retirement funding, promoting fiscal responsibility. The legislative debate illustrates a fundamental tension between managing current tax burdens for the city and ensuring the sustainability of public sector retirement benefits.
Provides for the incorporation of the Registrars of Voters Employees' Retirement Plan into the Louisiana State Employees' Retirement System (OR SEE ACTUARIAL NOTE)
Provides relative to the collection and enforcement of ad valorem tax proceeds due to the Registrar of Voters Employees' Retirement System (EN DECREASE FC LF EX)
Provides relative to provisions in Title 11 which are limited in applicability to political subdivisions or local areas meeting specified population characteristics (Item #8) (EN SEE ACTUARIAL NOTE)
Provides for the incorporation of the Registrars of Voters Employees' Retirement System into the Louisiana State Employees' Retirement System (OR SEE ACTUARIAL NOTE)