As I noted here, Louisiana Speaker of the House Jim Tucker is attempting to defeat needed pension reform in Louisiana by falsely claiming that requiring Louisiana state employees to contribute additional money to their pension is a payroll tax, which he opposes (because of course he is a fiscal conservative and all fiscal conservatives oppose taxes). Tucker has confirmed that he intends to treat the pension reform as a tax in a letter to the bill’s sponsor, which has been provided to RedState. You can read the full text of the letter here (warning, .pdf).
Tucker hinges his argument on the absolutely incorrect claim that the additional revenue the State will collect if the employees’ pension contribution is increased by 40% will be deposited in the State’s general fund. The money quote from Tucker’s letter is as follows:
The executive budget, as reiterated in original HB 1, on page 11, lines 22-25, indicate that the increase in revenue gained by the 3% retirement contribution increase required by HB 479, was to increas the state general fund (and not the retirement system itself) by $24.6M. Employees will pay an additional $70M into the system, supplanting $25M in state general fund payments and $45M in federal and other funds. The administration has admitted publicly numerous times that the reason for the increase in certain LASERS employee contributions is to fill a gap in general fund revenues.
Note that even Tucker lacks the courage of his convictions to flat out say that the money collected will go directly to the general fund, although that appears to be what he is selling the public. Rather, even he recognizes that the truth of the matter is that if the pension reform bill is not passed, Jindal’s budget recognizes the reality that an additional $24.6M of general fund money will have to be removed from the general fund in order to cover the pension shortfall. This is essentially akin to saying that if I use my credit card to buy groceries this month, I will have more money in my checking account so that I can afford my rent; it does not mean that I am putting money from my credit card into my bank account.
The Jindal Administration has fired back with a response which has also been provided to RedState, which you can read in full here (warning, .pdf). The money quote from the response:
There is no imposition upon a tax or fee upon the employee that goes into the General Fund. Rather, deferred compensation is credited to the employee and paid into the LASERS managed trust. The “purpose and result” of increasing the employee’s contribution is not that employee deferred compensation is converted to use by the General Fund. Rather, the increase on the employee side merely creates a net savings by decreasing expenditures from the General Fund that would otherwise be paid toward the employee retirement benefit. The absurd effect of the reasoning in your letter is that decreasing expenses of the government from the General Fund would constitute “revenue raising” which would mean every government cost-savings measure would need a two-thirds vote.
Read both letters and decide for yourself. It is bad enough that Jim Tucker is opposing pension reform which would save Louisiana taxpayers money under the false mantle of “fiscal conservatism,” but he has also apparently determined to falsely and incorrectly rig the vote by declaring the pension reform a tax, thus requiring a 2/3 vote and making the reform much easier for Democrats, government employee unions and LASERS advocates to defeat.