Louisiana leaders are still trying to hash out how a proposal to increase student fees at colleges and universities could be implemented in the coming year.
On one side: Gov. Bobby Jindal’s administration is calling for a tax credit that students could seek to cover the costs of the proposed fee, a dollar figure for which hasn’t been set and could likely vary by campus or program. On the other: higher education leaders argue any plan should avoid immediate out-of-pocket costs to students.
The fee idea, floated in Jindal’s budget proposal that was released last week, would infuse campuses with much-needed cash as they hope to stave off millions in cuts in the state spending plan that starts July 1. Jindal’s budget recommendation calls for a $211 million hit to higher education funding in the coming year, but it relies heavily on the state scaling back refundable tax credits. If that plan falls through, the actual cut to higher education would balloon to over half a billion dollars across colleges and universities.
All of the ideas are in the early stages and will be worked out or scrapped in the coming weeks. The legislative session begins April 13, and lawmakers have to finish their work in Baton Rouge by June 11 — leaving months of negotiations still to come. Any fee increase would require legislative approval.
Louisiana colleges and universities have increasingly relied on fee increases in recent years because fees aren’t tied to the Taylor Opportunity Program for Students in the same way that tuition is.
TOPS covers tuition for in-state students who meet certain academic standards in high school and through college. Any tuition increase would mean a direct increase to the state’s budget for TOPS.
State Higher Education Commissioner Joe Rallo said the “fee increase” supported by higher education leaders would never hit students. Instead, it would be covered by another fund — tied to an increase in the state cigarette tax or other revenue stream — that would pass additional money directly to colleges and universities on a per-student basis.
“There will be no out-of-pocket expense for students, ever,” he told The Advocate on Tuesday. “We want to make sure it’s very clear to everyone: a student will not pay one penny to this fee.”
The Jindal administration’s budget had called for providing additional money to higher ed based on a complex equation of fee hikes, tax credits for students and an increase in the state’s tax on cigarettes. All three elements would require legislative action, and no bills have been filed for any of the three items.
“Our premise is much simpler,” Rallo said.
The Division of Administration didn’t provide a comment to The Advocate this week in response to the higher education leader’s proposal.
But higher Ed leaders will continue working with the administration and the legislature to find the best outcome and a mutual solution, Board of Regents chairman Roy Martin said.
During the budget presentation, Commissioner of Administration Kristy Nichols explained the so-called “excellence fee” as an alternate source of funding for higher education that, if approved, the administration “would expect that there could be a tax credit” to offset.
“The family would be credited back the cost of the fee on their taxes,” she said.
The money for that tax credit would rely on the state raising its cigarette tax to the Southern average, which is 83 cents. Louisiana’s cigarette tax is 36 cents. By the administration’s calculations, the proposed increase would generate about $100 million.
Pearson Cross, a political scientist at the University of Louisiana at Lafayette, said at a recent panel discussion on the budget that the math is fuzzy but gives Jindal a way to stick to his “revenue neutral” guns.
“If he’s going to raise taxes and fees, he wants to show how it’s returned,” Cross said. “Really, we’re gambling that you won’t apply for it on your taxes.”
During the Jindal administration’s budget presentation, state Rep. Katrina Jackson, D-Monroe, had questioned why the plan would rely on money coming through the Department of Revenue as a tax credit, rather than direct funding to schools. “That really makes it shaky for me to support,” she said.
Rallo said the plan he’s pushing would largely avoid such concerns.
“There are many students out there who can’t come up with that extra money for a new fee,” he said. “We don’t want this to be seen as limiting student access.”
Rallo said leaders are working to ensure that any plan would not impact student financial aid packages or federal aid programs.