Pay down retirement debt now, two urge

• By WILL SENTELL
• Advocate Capitol News Bureau
• Published: Dec 2, 2008 - Page: 1A - UPDATED: 12:40 a.m.

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State leaders should consider using more than two-thirds of the budget surplus to help pay off Louisiana’s $10 billion retirement debt, leaders of two retirement groups said Monday.

Without drastic action, they said, the state’s retirement obligation soon will start gobbling up a huge part of the budget and cripple aid for schools, roads and bridges and other services.

“We have this window of opportunity,” said Cindy Rougeou, executive director of the Louisiana State Employees Retirement System.
Rougeou and Maureen Westgard, director of the Teachers Retirement System of Louisiana, made their comments to the Press Club of Baton Rouge.

Rougeou’s group represents about 99,000 current and retired state employees, including legislators. 

Westgard’s organization represents about 147,000 current and retired teachers and other educators.

The two systems have a combined debt of about $11 billion.

Under a constitutional amendment voters approved in 1987, about $10 billion of that debt has to be paid off by 2029.

The state spends $673 million annually to do that.

That payment is set to rise yearly and reach nearly $1 billion by 2018. It would then continue growing and top $1 billion per year for the next 11 years.

“The payment schedule is back-ended,” Westgard noted.

Westgard and Rougeou said that, while they are not allowed to lobby, they favor legislative calls to use part of Louisiana’s $865 million budget surplus to trim the debt, and make future  retire payments more realistic.

Rougeou said Senate Retirement Committee Chairman Butch Gautreaux, D-Morgan City, has said he wants to use upward of $600 million of the $865 million state surplus to trim retirement obligations during the legislative session that begins April 27.

She said such an investment “would be tremendous.”