Requires application of certain amounts of minimum foundation program formula funds to the initial unfunded accrued liability of the Teachers' Retirement System of Louisiana (OR -$174,800,568 FC LF EX)
Impact
The fiscal implications of HB 37 are notable, as it is projected to decrease local fund expenditures by approximately $174,800,568 annually. By shifting this cost to the state through adjustments in MFP funding, local school districts will not be responsible for these amortization payments. However, this could also lead to decreased MFP payments available to schools, including charter schools, as the funds will be diverted to cover the amortization payment. The overall financial plan indicates that there will be no change in the General Fund or agency self-generated revenues, but a significant alteration in the flow of funds related to local education finance.
Summary
House Bill 37, authored by Representative J. Kevin Pearson, proposes a significant change in the way K-12 education in Louisiana is funded, particularly with respect to retirement contributions. The bill mandates that the Louisiana Department of Education (LDOE) deduct employer contributions related to the Original Amortization Base (OAB) directly from the Minimum Foundation Program (MFP) funds allocated to school districts. Instead of individual school districts sending these contributions to the Teachers' Retirement System of Louisiana (TRSL), the LDOE would handle this deduction and direct payment, resulting in a reduction in the employer contribution rate for K-12 teachers. This change is expected to relieve individual school districts of considerable financial responsibilities, easing their burden.
Sentiment
The sentiment surrounding HB 37 is mixed. Advocates of the bill argue that it simplifies the funding process for school districts and alleviates their financial strain, thereby supporting local education systems in a time of budgetary constraints. However, opponents are concerned that redirecting these funds could lead to a decrease in the overall educational funding across the board, especially for districts that rely heavily on MFP allocations. The discussion reveals a broader tension between ensuring stable retirement funding for educators and maintaining robust support for day-to-day educational needs.
Contention
Notable points of contention include the potential implications for charter schools and the risk of diminishing the financial sustainability of local school districts. Critics question whether the changes will ultimately benefit all schools equally, fearing that the reallocation of funds may not be adequately addressed in the bill. While the bill aims to streamline contributions to the TRSL, stakeholders are wary of how these modifications might affect education quality and access across different districts, particularly those already facing financial challenges.
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)
Requires application of certain amounts of minimum foundation program formula funds to the initial unfunded accrued liability of the Teachers' Retirement System of La.
Requires application of certain amounts of minimum foundation program formula funds to the unfunded accrued liability of the Teachers' Retirement System of Louisiana
Requires allocation of certain amounts of minimum foundation program formula funds to the unfunded accrued liability of the Teachers' Retirement System. (gov sig) (OR SEE FISC NOTE GF EX)
Provides relative to payment of initial unfunded accrued liabilities to the Teachers' Retirement System of Louisiana by the Legislature of Louisiana (OR NO IMPACT APV)
Provides relative to the payment of accrued liabilities of retirement systems and other retirement obligations from minimum foundation program funds allocated to charter schools (OR DECREASE FC LF EX)
Requests the State Board of Elementary and Secondary Education to explain how the minimum foundation program is calculated to ensure funding of the unfunded accrued liability.
Provides relative to the payment of unfunded accrued liabilities of the Teachers' Retirement System of La. from minimum foundation program funds allocated to charter schools (OR INCREASE SG RV See Note)