Amendment 3 on the May 16, 2026 ballot is sold to Louisiana voters as a permanent teacher pay raise. On the mechanism level, it is not a pay raise. It is a one-time liquidation of three constitutionally protected trust funds, transferred to the Teachers' Retirement System of Louisiana (TRSL) to pay down pension debt ahead of schedule, on the theory that the resulting reduction in school-district pension contributions will free up enough money to fund permanent salary increases. This paper walks through that theory step by step, compares it to the numbers the Legislature's own Fiscal Office was able to produce, and explains why the Fiscal Office ultimately concluded that "the actual financial impact cannot be fully quantified."
Amendment 3 liquidates three separate education trust funds:
The combined fair-market value of the three funds is approximately $2 billion. By the terms of Amendment 3, the State Treasurer is directed to liquidate them and transfer their full value to TRSL no later than May 31, 2026 — fifteen days after the amendment would be ratified.
The relevant number is not the principal; it is the recurring yield. The EEF and the LEQTF function as permanent endowments: the principal is invested, and a specified portion of the investment return is distributed each year for their dedicated purposes. According to the Fiscal Note for HB 473 (the vehicle that became Act 222), the three funds together produce approximately $68 million per year in recurring distributions for education purposes. That figure is the immediate cost of Amendment 3. It is money that currently reaches Louisiana classrooms, universities, and pre-K programs, and that will stop reaching them the moment the funds are liquidated.
The amendment's proponents argue that the loss of $68 million per year is offset, in the long run, by the savings Louisiana school districts will realize from reduced TRSL pension contributions. The mechanism works as follows:
That is the theory. It is not obviously wrong. A smaller UAAL does produce lower required contributions, and lower contributions do produce district-level savings. What is wrong is the comparative magnitude of the numbers and the certainty with which the theory is sold.
The Fiscal Note prepared by the Louisiana Legislative Fiscal Office for HB 473 — a document required by statute to accompany any bill with a fiscal impact — contains three findings that have received less public attention than they deserve:
"The actual financial impact cannot be fully quantified. However, the fiscal tables clearly indicate an expectation that expenditures INCREASE while revenues DECREASE." — HB 473 Fiscal Note, Louisiana Legislative Fiscal Office, 2025
Translated from fiscal-officer language: (a) the net effect on the state budget cannot be calculated with precision, (b) on the expenditure side, the state will spend more than it does today, and (c) on the revenue side, the state will collect less than it does today. Those two directions do not converge. They diverge. The Fiscal Note does not say the spread will be modest or temporary — it says the analysts could not quantify the spread at all.
The second finding: the Fiscal Note acknowledges that if the pension savings do not fully cover the required raises — and it explicitly flags that this may occur for certain school districts and all charter school teachers — the state is constitutionally obligated under the amendment's own terms to cover the shortfall through increases in the Minimum Foundation Program (MFP) formula. That is a permanent new claim on the General Fund. There is no sunset and no cap.
The third finding: the analysis of HB 473 by Citizens for a New Louisiana (a conservative-leaning good-government organization that otherwise tends to support fiscal-reform amendments) estimates the annual cost of the raises, including benefits and retirement contributions, at approximately $180 million to $200 million. The $2 billion principal of the trust funds is a one-time deposit; the $180–$200M in raises is a permanent obligation. Even at 8% annual returns — a rate no responsible actuary would assume — the interest on $2 billion is $160 million a year. The amendment has set up a revenue-to-obligation mismatch of roughly $20–$40 million in year one, growing with each step up in salary schedules.
A fiscal cliff, in government-finance terms, is the point at which a government's commitment to permanent spending outruns the non-permanent revenue source that was supposed to fund it. Louisiana has lived through fiscal cliffs before. The most recent was the 2015–2018 cliff created by temporary "clean penny" sales-tax legislation: voters were told the penny was temporary, legislators spent it as though it were permanent, and when the penny expired, the state faced a $1 billion hole that required two years of special sessions, deep budget cuts, and emergency revenue measures to plug.
Amendment 3 builds the next cliff deliberately. In the first several years after the TRSL paydown, the combination of (a) pension-contribution savings, (b) whatever investment returns are still generated on the portion of the $2 billion not yet amortized, and (c) MFP-formula backstops may be sufficient to cover the raise and absorb the $68 million in lost recurring education funding. At some point — exactly when depends on investment performance, actuarial assumptions, payroll growth, and the TRSL board's discount-rate choices — the mathematics stop working. The Fiscal Office was not able to predict when. What it was able to predict is that the two lines cross, and expenditures exceed the revenue attributable to the paydown.
When that happens, the Legislature has four options: (1) raise taxes to fund the raise on a recurring basis, which is what should have been done initially; (2) cut other spending to fund the raise; (3) reduce, defer, or repeal the raise, which would require a statutory change; or (4) increase the General Fund appropriation to cover the shortfall, which is a tax increase by another name. In Louisiana's recent history, option (4) — paper over the shortfall with General Fund money until another crisis forces a different choice — has been the default.
The test for whether a pay raise is a "real" raise is simple: is there a recurring revenue source dedicated to funding it, and will that source produce enough money to cover the raise in perpetuity? Amendment 3 fails both prongs of that test:
A real raise would look different. It would be funded through the MFP formula on recurring General Fund revenue, which is the mechanism LFT President Larry Carter publicly told legislators he preferred. It would be indexed to inflation or to the Southern-states average so that pay gaps do not re-open after each raise. It would be negotiated with both teacher unions and local school boards rather than imposed top-down through a constitutional amendment. And it would be paid for by naming the revenue source openly rather than by cashing out an endowment.
Amendment 3 is not a teacher pay raise. It is a one-time liquidation of Louisiana's education trust funds, marketed as a raise. The raise is real for a period of time. The liquidation is permanent. When the mathematics stop working — and the Legislative Fiscal Office has told us in writing that it expects them to — the cost will land on the General Fund, on Louisiana's already-overstressed education budget, or on the teachers themselves when the raise is quietly reduced or rescinded. Teachers deserve a real raise. Louisiana's students deserve their inheritance. Amendment 3 delivers neither. Vote NO.