Louisiana House Bill HB44

Louisiana 2014 Regular Session

• Introduced: 3/10/14
• Refer: 3/10/14

Caption

Requires application of minimum foundation program formula funds to the unfunded accrued liability of the Teachers' Retirement System of Louisiana (OR -$756,394,593 FC LF EX)

Impact

The fiscal implications of HB 44 are substantial, as it is projected to decrease local funding by approximately $756 million annually, redistributing these funds towards TRSL. This legislative move aims to reduce the burden on local school district budgets, which have historically been responsible for these retirement costs. While this may lessen the immediate financial strain on school districts, the overall impact on educational funding dynamics remains a significant point of contention and concern.

Summary

House Bill 44 requires the Louisiana Department of Education (LDOE) to apply funds from the Minimum Foundation Program (MFP) directly towards the unfunded accrued liabilities of the Teachers' Retirement System of Louisiana (TRSL). This policy change shifts a significant portion of amortization costs from individual school districts to the state, altering how educational funding is allocated. Specifically, LDOE will deduct 100% of employer contributions related to K-12 education’s unfunded liabilities from MFP funds before distributing these resources to local school districts.

Sentiment

The sentiment surrounding HB 44 is mixed among education advocates and legislative representatives. Proponents argue that the bill will alleviate financial pressures on schools, allowing them to allocate more resources directly to education. However, opponents express concern that this shift could harm local control over educational finances, potentially leading to funding inadequacies at the district level, particularly in economically disadvantaged areas. The debate highlights contrasting viewpoints regarding state responsibility versus local governance in education funding.

Contention

Notably, a point of contention within the discussions about HB 44 involves the potential impact on charter schools, which may see a reduced proportional share of funding as amortization payments are reallocated. The bill does not impose new costs on the state; however, it does present a long-term liability for future state budgets in recognition of the unfunded liabilities. This raises questions about the sustainability of such fiscal policies amidst fluctuating state revenues.