Drastic reforms for better teacher pensions could help Louisiana schools financially

Chad Aldeman:

Louisiana has been pouring money into its schools over the last ten years at twice the rate of inflation, but that money isn’t reaching teachers or students.

There are two basic trends that explain this riddle. One, large increases in spending on noninstructional “support services” accounts for about half of the difference. And two, Louisiana has doubled the amount of money it is paying toward employee benefits. As a state, Louisiana’s schools and districts are now spending more than $3,000 per student on employee benefits.

Much of this is driven by huge increases in the cost of paying down unfunded liabilities in the state’s teacher pension system. Today, Louisiana has one of the most expensive teacher pension system in the country — and also one of the least generous.

To make up for a shortfall of almost $12 billion, Louisiana school districts are now forced to pay more than 30 percent of each teacher’s salary toward the state pension fund. The vast majority of that contribution goes to pay down debts, not for actual benefits for teachers. For at least the last 25 years, Louisiana has never paid its pension bills in full, causing the debt to grow and grow.