Louisiana House Bill HB170

Louisiana 2023 Regular Session

• Introduced: 3/23/23
• Refer: 3/23/23
• Refer: 4/10/23
• Report Pass: 4/19/23
• Engrossed: 4/25/23
• Refer: 4/26/23

Caption

Dedicates a portion of the 0.45% state sales tax to payment of the Teachers' Retirement System of La. initial unfunded accrued liability and to highway and bridge preservation projects (RE -$444,300,000 GF RV See Note)

Impact

The passage of HB 170 signifies a critical legislative move intended to reduce the teachers' retirement system's IUAL. This allocation creates a more sustainable funding source for TRSL while simultaneously addressing pressing infrastructural concerns through highway and bridge projects. The integration of these two funding needs reflects a strategic approach to state budget alignment, prioritizing both educational and infrastructural investment. Through this funding mechanism, there is a potential for improved financial management for the TRSL, which has been historically underfunded.

Summary

House Bill 170 is aimed at addressing the Initial Unfunded Accrued Liability (IUAL) of the Teachers' Retirement System of Louisiana (TRSL) by allocating a portion of the 0.45% state sales tax to both the IUAL and highway and bridge preservation projects. This bill establishes the Louisiana Preservation Fund, which will manage and distribute tax revenues towards these objectives, particularly utilizing any unspent funds for future years. The bill aims to positively impact funding for essential state employee retirement systems while also enhancing infrastructure projects, thereby attempting to create a more stable financial environment for Louisiana's educators and public roadways.

Sentiment

Sentiment around HB 170 appears to be generally supportive among lawmakers who recognize the necessity of addressing the IUAL for TRSL and the state’s infrastructure demands. However, contention exists regarding the shift in tax allocations and whether prioritizing the IUAL may detract from other critical areas needing state funding. Advocates argue the bill fulfills urgent financial responsibilities for educators and infrastructure, while critics worry it might not sufficiently address broader budgetary challenges or lead to further financial complications.

Contention

One notable point of contention surrounding HB 170 is the balance between funding obligations to the TRSL and potential impacts on other programs reliant on state revenue. The establishment of the Louisiana Preservation Fund and the dedicated sales tax revenue could create limitations or shifts in budgetary priorities that might adversely affect other sectors. Moreover, the long-term effectiveness of this approach in fully resolving the IUAL issue is debated, given the complexity of state funding dynamics and the historical challenges of pension management.