When the state House of Representatives waved through a cost-of-living increase, or COLA, for thousands of state retirees, the biggest champion of the proposal was jubilant.
“The key point,” said Rep. Sam Jones, the Franklin Democrat who sponsored House Bill 32, “is we have consensus to pass a COLA.”
This reminds us of the jibe that Earl K. Long once threw at one of his political enemies, a car dealer: The guy would be a good fellow to buy one car from, but two cars was too big a deal for him.
The COLA is an increase in the state’s pension obligations costing $385 million. That’s the one car that Jones sold his colleagues.
The pension systems’ debt load is $20 billion, with a B. That’s the two cars that the House can’t handle.
When the Senate earlier passed a COLA bill, the raise was authorized under a 2014 reform bill that set criteria for granting the inflation adjustments. One critical measure was, of course, inflation, and that was not met.
The Senate justified its support of the illegal COLA — a valuable political bill for the lawmakers — by pushing two more reforms in management of the debt-laden retirement systems.
The COLA in Senate Bill 2 is conditioned on the passage of a couple of other bills that tweak how the retirement system funds retirements and pays for administrative costs. HB32, on the other hand, carries no conditions and would simply raise the benefits.
One car is a deal House members can handle, but we’re not seeing that they can handle the bigger question of long-term reform for these unfunded liabilities.
We would favor passage of the other Senate bills, both pushed by Retirement Committee Chairman Barrow Peacock, R-Shreveport, regardless. Obviously, the House and Senate should not pass a COLA when it does not meet the requirements written into law only two years ago. Passing a COLA now and with a general disregard for the larger problem is just wrong. A “cost-of-living” adjustment ought to be based on inflation, which is, after all, the measure of the cost of living.
Both Jones and Peacock acknowledge that the federal consumer price index last year wasn’t high enough to trigger a COLA.
However, they argue, the cost of health care and food, on which seniors spend most of their money, rose last year, while the collapse of energy prices drove down the official inflation rate. When looking at the rise in consumer prices over the past two years, the inflation rate is plenty high enough, both Jones and Peacock said — a rationalization for the politically popular course, in contravention of the plain language of the 2014 law.
It looks like the politics of the COLA are going to overcome the math, but if so, we urge the House to adopt Peacock’s proposals for smaller tweaks. Over time, the state must tackle the big problem of its vast unfunded accrued liabilities in retirement systems.
That appears to be too big a deal for our current lawmakers to handle.