March 19, 2013 03:55

The Louisiana Supreme Court was to hear back-to-back arguments Tuesday afternoon about the expanded school voucher program and the plan to shift future rank-and-file state workers to a 401(k)-style retirement plan.

NEW ORLEANS (AP) - Lawyers for the state are defending two centerpieces of Gov. Bobby Jindal's 2012 legislative agenda - both found unconstitutional.

The Louisiana Supreme Court was to hear back-to-back arguments Tuesday afternoon about the expanded school voucher program and the plan to shift future rank-and-file state workers to a 401(k)-style retirement plan.

State District Judge Tim Kelley found that the voucher program unconstitutionally diverts public money to private and parochial schools. District Judge William Morvant found that the retirement plan needed a two-thirds majority rather than the simple majorities it got in both House and Senate.

The voucher program started in New Orleans and expanded statewide this year for lower-income students at schools with a state rating of C, D or F. Such schools make up 63 percent of Louisiana's 1,303 public schools. Only 471 got an A or B last year.

The state is paying about $25 million in tuition and fees this year for 4,944 students at 117 schools. Names such as St. Alphonsus School, New Orleans Adventist Academy, Conquering Word Christian Academy, and New Orleans Jewish Day School make it clear that more than 100 of them are religious.

Kelley ruled Nov. 30 at the end of a three-day trial of consolidated lawsuits filed by Louisiana's two largest teacher unions and the state's school boards association. They challenged the legality of both the voucher bill and the annual education funding formula, which provided about $3.4 billion in basic state aid for schools and students.

Kelley found that both the law and the funding formula are unconstitutional for two reasons: They give private and parochial schools money required by the state constitution to go to public schools, and they divert local tax money from local school districts.

He didn't rule on whether state taxes could be spent on private school tuition, as they were for the voucher program in New Orleans from 2008 through the last school year.

The judge also ruled it was unconstitutional to use the public school money for another program, which has not yet started but for which the department is registering students. It would let students take online and apprenticeship-type courses run by private companies and others outside of the public school system.

The retirement bill calls for employees hired after July 1, to get investment accounts rather than monthly retirement payments based on salary and years of employment. Unlike people with traditional 401(k) plans, Louisiana's employees would never lose money for investment slumps.

The switch would apply to rank-and-file state employees and university staff - not to law enforcement or other hazardous-duty workers nor to public school employees.

Supporters say it would rein in the costs of retirement programs that are billions of dollars short of the money they'll need to pay for all benefits promised. Opponents said the new investment account wouldn't give state workers enough of a safety net.

Morvant's ruling against the plan hinged on the Jindal administration's use of an outside analyst who predicted big savings when the Legislature's retirement analyst said the new plan could be more expensive than the present system.

A two-thirds majority vote is needed for bills that will increase costs.

Lawyers for the Jindal administration argued lawmakers could decide which analysis to use.

The Legislature's chief actuary is constitutionally charged with reviewing legislation, Morvant said. "I know of no authority for the Legislature to receive the constitutionally-mandated note from the legislative (actuary) and say, 'Great, we got it, now we can ignore it.'"