Louisiana Municipalities Face Higher Firefighters' Retirement

Jan. 20, 2005
The high court upheld a law which sets firefighters' and the state's shares of the Firefighters' Retirement System at a fixed percentage of salaries, leaving local governments to shoulder any increases.

NEW ORLEANS (AP) -- While most local governments fighting a boost in their share of firefighters' retirement pay are paying the increases, some will face hefty bills when a Louisiana Supreme Court ruling goes into effect.

The high court upheld a law which sets firefighters' and the state's shares of the Firefighters' Retirement System at a fixed percentage of salaries, leaving local governments to shoulder any increases.

It's a burden but a constitutional one: the Legislature, not the courts, would have to change it, the justices ruled Wednesday in a lawsuit brought by the Louisiana Municipal Association and joined by 68 local governments.

Most of those governments and a group which did not join the lawsuit have been paying the higher bills as they came in, said Steven Stockstill, director of and legal counsel for the Firefighters' Retirement System.

However, about one-quarter have continued to pay the 9 percent starting rate, under a state court order freezing the rate at that figure.

When the Supreme Court's ruling takes effect, they will be billed for the increases, which have risen in several steps to 21 percent, plus interest, Stockstill said.

''Just for the fiscal year 03-04 _ just for that fiscal year _ it was $7.6 million,'' he said, emphasizing that both that number and the fraction of governments involved were ballpark figures.

The ruling won't take effect for at least two weeks _ longer if the Louisiana Municipal Association asks for a rehearing. Executive director Tom Ed McHugh could not be reached Thursday for comment on whether it will do so.

The ruling also means almost certain defeat for a similar lawsuit against increases being paid for the larger Louisiana Municipal Police Employees' Retirement System.

The LMA and local governments had sued both systems, saying it was unconstitutional to dump all increases on them. Many governments have said they can't afford the contribution. Since it's a percentage of officers' pay, layoffs are the only way to reduce it.

Even while finding the law constitutional, the high court acknowledged that the higher contributions could seriously hurt local governments.

In a concurring opinion, Chief Justice Pascal Calogero said the system imposes a burden ''that could easily become insurmountable in the coming years. In fact,'' he wrote, ''the system today presents a threat to the fiscal integrity and survival'' of many of the governments which joined the lawsuit.

Stockstill said the fund covers 4,924 firefighters _ 3,431 of them active, 1,379 retired and 114 in a third category, in 101 municipalities and parishes. It does not include New Orleans or Baton Rouge, which have their own retirement systems.

The Louisiana Municipal Police Employees' Retirement System covers more than 150 departments with 9,500 full-time officers.

''We went into court knowing there would be no winners,'' McHugh said Wednesday.

The court's decision was split over several aspects of the complex issues, with dissents by Justice Jeannette Knoll and retired Judge Walter L. Lanier, sitting in for Justice Bernette Johnson.

Knoll warned that ''the absurd consequences'' from the majority's interpretation of the case will cause local municipalities to severely cut, if not eliminate, fire protection.

Both Calogero and the majority decision written by Justice Chet Traylor pointed out that the Legislature has the authority and power to fix it _ by appropriating more money, tapping tax sources, or adjusting the required contributions.

Several attempts to do just that have failed over the past few years.

Stockstill said the Legislature found money to cover the first year of the increases, which started in 2000.

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