Nearly $1 of every $4 in state aid sent annually to Louisiana’s public schools disappears before it reaches classrooms, siphoned away to pay retirement obligations that cost $853 million a year, according to a new report from the legislative auditor.
The retirement debt payment amounts to $1,302 per student and swallows an average of 10% in the total funding available for schools from state, local and other sources, according to the 44-page review from Legislative Auditor Mike Waguespack’s office.
The Advocate reports the audit said the Louisiana Legislature might want to consider revamping how the retirement debt for former teachers is handled in a way “that could be less burdensome for participating schools.”
State aid for public schools totaled $3.9 billion for the 2019-20 budget year reviewed by auditors. The teacher debt obligation grabbed 24% of that allocation, the report says. A total of 1,355 traditional and charter schools take part in the retirement system.
Author(s): Associated Press
Publication Date: 24 Oct 2021
Publication Site: Biz New Orleans
In a white paper for The Pew Charitable Trusts, Eric Scorsone and Natalie Pruett of the Michigan State University Extension’s Michigan Center for Local Government Finance & Policy assessed local government early warning systems through case studies in Colorado, Louisiana, Ohio, and Pennsylvania. Each of these states applies various financial ratios—an approach known as ratio analysis—and other indicators to identify signs of local fiscal distress. Ratio analysis uses fractions that capture financial or economic activity within a locality—such as total expenditures over total revenues—to measure solvency, the ability to pay debts and liabilities over the short or long term. Ultimately, the authors determined that there isn’t one optimal system and instead offer several recommendations for states to build or improve their early warning systems.
The authors present detailed descriptions of the four states’ systems and analyze trade-offs and implications of the indicators employed to measure different types of solvency. They offer a variety of recommendations for states to consider, including use of indicators for four types of solvency:
Author(s): Jeff Chapman
Publication Date: 4 March 2021
Publication Site: Pew Trusts