With session heading into the home stretch, there are still a number of important issues for lawmakers to take up—top among them is pension reform.
The pension reform package under consideration by the legislature would move the state away from the unsustainable defined benefit plan currently in place. According to the office of the Governor, state retirement costs have quadrupled over the last two decades from $478 million in FY90 to $1.9 billion today. The accrual of $18.9 billion in unfunded liabilities due to the present system places an unreasonable burden on taxpayers.
Projections show that if passed in its entirety, Gov. Jindal’s pension reform plan will save taxpayers $450 million in the first year and more than $1.5 billion over the next 5 years. Additionally, the unfunded accrued liability will be reduced by $500 million immediately and its growth will be slowed.
With time waning in the session, the six-part pension reform package has a long way to go. Five of the most fundamental parts of the package have yet to pass. See the Pelican Institute’s “A Pension Reform Primer” for more details on the pending legislation, a step in the right direction for the Louisiana.
Aside from the pension reform package, there are still threats of tax increases on the radar. Two bills are being considered which would permit a 3 percent excise tax on car rentals in certain parishes, eradicating the benefits of the upcoming sunset provision. This tax hike is ill-advised—it will adversely impact the state’s economy, hurt businesses, and serve as an unnecessary annoyance to Louisiana residents and tourists alike. Not to mention, a discriminatory rental car tax would take a disproportionate toll on an industry that is vital to the Louisiana economy and the livelihood of a great many Pelican State residents: tourism.
The end of session is no time to grow complacent. Louisiana taxpayers must remain vigilant. ATR encourages Louisiana taxpayers to contact their representatives in Baton Rouge to encourage them to pass Gov. Jindal’s pension reform package and reject a rental car tax increase.