Louisiana voters soundly rejected all five constitutional amendments on the May 16 ballot, including, for the second time, a scheme to liquidate roughly $2 billion from three education trust funds for lawmakers to put toward the $8.5 billion in unfunded debt the state owes the Teachers’ Retirement System of Louisiana (TRSL), the pension fund for the state’s public educators.
Amendment 3 was sold as a teacher pay raise and a pension fix. It was neither. As lawmakers reset the table for the next round of potential teacher compensation challenges, they should keep the TRSL system and its burden on employers and educators’ pocketbooks in focus rather than lean on accounting moves for fleeting, short-sighted pay bumps.
In their May 26 joint press conference, Gov. Jeff Landry and Republican legislative leaders framed Amendment 3’s failure as a loss for teachers, but it wasn’t. Amendment 3 was always a financial maneuver dressed up as reform that did nothing to address the structural issues that led to TRSL contribution rates exceeding a third of a teacher’s salary just to pay off pension debt. At the same press event, the group announced a new task force to secure permanent teacher pay raises by reviewing the state’s Minimum Foundation Program (MFP)—the formula that determines how much state money each school district receives—with the aim of shifting responsibility for teacher pay from the state to local employers.
The previous pitch, now rejected twice by voters, first surfaced in 2022 and comprised three steps. First, the state would liquidate $2 billion from three constitutionally protected education trust funds. Second, the state would give the money to TRSL to reduce the pension fund’s $8.5 billion debt to $6.5 billion. Third, the state would allow school districts to use the savings from reductions in TRSL debt payments to fund a permanent $2,250 pay increase for teachers.
Most people can understand the logic between steps one and two and the prudence of using cash to pay down debt. However, step three and turning the $2 billion of paid-off TRSL debt into permanent teacher pay raises was always rooted in speculation and actuarial gimmicks, specifically the manipulation of the actuarially determined employer contribution (or ADEC) rate that actuaries say is needed to keep the pension in line with funding standards.
Actuarial modeling by Reason Foundation’s Pension Integrity Project—which has analyzed TRSL’s finances for state lawmakers—shows that even with the full $2 billion applied, the TRSL funded ratio would only improve from 77.2% to 82.8%—and the system would remain deeply vulnerable to any market underperformance.
More importantly, the one-time infusion of an extra $2 billion lowers the ADEC rate from around 21% to 17%. That 4% difference is what lawmakers are calling “savings” that local employers can use for teacher pay increases. What they fail to mention is that the same modeling also shows the ADEC rate could still spike to 29% after a recession scenario. The supposed “savings” are not a sure thing. But the raises—which would be baked into employment contracts—would remain. Local school districts would get squeezed from both sides, and taxpayers would be left holding the bag with no structural reform in place to reduce future risk.
The $8 billion TRSL debt is real
TRSL’s $8.5 billion debt is not an abstract accounting theory. Defined benefit pensions are constitutionally protected obligations on the state’s books. Louisiana accumulates interest at TRSL’s 7.55% assumed rate of return, one of the highest rates in the nation, every single year the debt goes unpaid.
To prevent that growth, voters in 1987 committed to funding the system annually at the ADEC rate. At that point, the employer contribution rate jumped from 10.3% of an educator’s salary in 1988 to 17.2% in 1989. The rate peaked around 30% in 2015 when TRSL benefits were only half-funded and has gradually declined to near 21% in 2025 as the system’s funding has improved.
TRSL administrators expect employer contribution rates to continue to fall over the next few years if investment expectations prove true. However, if the legislature and employers use the difference from the employer contribution rate reduction to TRSL each year as a resource to expand benefits, they would undercut those gains by adding liabilities on the back end. It amounts to adding miles to a marathon the state and its taxpayers have been running since 1988. The results will be more education dollars going to servicing expensive pension debt rather than educator take-home pay or classroom instruction.
What the MFP task force should do about TRSL
The two goals of the MFP task force outlined during the governor’s May press conference were addressing growing administrative costs and issuing teacher pay raises in a way that allows local school districts that employ Louisiana educators to provide compensation adjustments directly. The task force has been handed a genuine opportunity, but only if it takes the full picture seriously. Finding permanent teacher pay raises within Louisiana’s $13 billion education budget is a legitimate exercise—the dollars exist, and the current MFP formula’s poor targeting of classroom compensation is a real problem worth fixing.
But allowing local school districts to increase salaries means school districts will also increase TRSL liabilities underwritten by the state. This is why the task force’s mandate should not stop at teacher pay. It should explicitly address TRSL funding as a parallel obligation, not an afterthought.
The task force should recommend that any MFP reform include a mechanism to direct incremental employer savings—as the funded ratio improves and contribution rates decline—back into accelerated pension debt paydown rather than immediately reprogramming every dollar of rate relief into salary increases. This is not a novel idea: It is the logic originally embedded in Amendment 3, minus the gimmick of the one-time trust fund liquidation. Done through the MFP on a sustained, structural basis, it is actually more durable.
The task force should also address the assumed rate of return directly. TRSL’s 7.55% assumption is a policy variable that shapes every contribution rate, every pension debt projection, and every discussion about what employers can “afford” to pay teachers. Aligning the assumption with the national median of 7.0% would produce a more honest balance sheet, a larger reported unfunded liability in the short term, but more predictable contribution rates, and a better chance at reaching full funding over time. That transparency is uncomfortable, but it is also necessary to finally address the lingering TRSL debt.
Finally, the task force must recognize that the TRSL benefit, as expensive as it has been for generations, serves only a fraction of the educators. According to TRSL’s own assumptions, as few as 15% of new hires stay long enough to earn a full retirement benefit. In other words, the system withholds wages from the vast majority of educators to fund a benefit most of them will never collect. States like Michigan, Florida, Tennessee, and Mississippi let educators choose among retirement plans when first hired—including portable options that teachers can take with them if they leave the classroom after five years instead of 30. A choice allows educators the freedom to pursue their life goals without worrying that their retirement nest egg is being held hostage.
Employer contribution rates have come down significantly because the plan and legislative appropriators have made genuine progress on Louisiana’s teacher pension debt—and that progress is exactly what’s at risk if the MFP Task Force treats every dollar of ADEC rate relief as a permanent teacher pay raise rather than a financial buffer against the next market downturn.
Louisiana voters rejected Amendment 3 twice, not because they don’t care about teachers, but because they have seen enough budget maneuvers dressed as reforms to recognize one on the ballot. The real gift of that rejection is an opportunity to do this right. A sustainable teacher pay raise and a solvent TRSL are not competing goals—they are the same goal, viewed on different time horizons. The MFP Task Force has until December 31. The deadline is not just to raise teacher pay—it is to prove Louisiana’s leaders understand why those two goals are one.