Gov. Bobby Jindal vetoed legislation Friday that included a cost-of-living adjustment for about 130,000 retired state employees, teachers, school employees and State Police.
The 1.5 percent COLA would have gone into effect July 1 to help retirees struggling to meet rising costs of the state’s health insurance program.
The measure, popular among legislators, encountered difficulty on the way to Jindal’s desk, resurrected in the last minutes of the legislative session as the sponsor of a revenue raising measure threatened to sit on it if the COLA wasn’t approved.
In his veto message, Jindal said granting the pension check boost “jeopardizes the state’s credit rating by violating previous retirement reform efforts.”
Jindal referred to a law passed in 2014 which specified that COLA could be granted every other year. He said the retirees got one in 2014 so one was not due this year.
That law limited both the frequency and amount of future benefit hikes so that more dollars could go toward reducing the $19 billion long-term retirement systems’ debt.
House Bill 42 sponsor Rep. Sam Jones reacted angrily to Jindal’s veto.
“HB42 was a revenue neutral COLA for retirees in the four state systems, paid from excess earnings that accumulate only when the systems have exceptionally good returns,” Jones said. “The only reason to veto this is to prove something to some caucus in Iowa, or help a future governor sweep these retirement funds for an illegal purpose.”
The Franklin Democrat said: “This bill had reforms in it that would have made the systems (financially) stronger sooner. There is absolutely no way it would have any impact to our bond rating other than a positive one.”
The State Employees, Teachers and State Police systems had asked Jindal to approve the bill, sending him an actuarial analysis that concluded bill provisions would help improve the system’s long-term financial liabilities more quickly.
State Sen. Elbert Guillory, R-Opelousas, chairman of the Senate Retirement Committee blamed Jones’ insistence on getting the COLA this year on HB42’s demise. He said the “retirement reform” provisions added to Jones’ bill with a 2016 COLA effective date would have received Jindal endorsement.