State legislative leaders offered no firm solutions or big ideas Monday for higher education officials who are bracing for deep budget cuts in the coming year.
“We have a structural problem in the budget and the state education system,” said Conrad Appel, R-Metairie, Senate Education Committee chairman. “It exists from pre-K through postsecondary and up through graduate programs.”
The leaders of Louisiana’s college and university systems held a daylong conference in Baton Rouge on Monday, with the budget serving as a key topic throughout.
Higher ed funding could be slashed up to $500 million in the coming year because of the state’s anticipated $1.6 billion budget shortfall. Gov. Bobby Jindal’s administration will release his spending recommendations Friday, and state lawmakers will work to hash out and approve a final budget during the legislative session that begins April 13. The budget will take effect July 1.
House Education Committee Chairman Steve Carter, R-Baton Rouge, said higher education has an image problem among lawmakers.
“A lot of people don’t think we’re maximizing our dollars (and) there’s too much duplication,” he said. “We need to have some tough discussions about where we’re going.”
The session’s start is just weeks away, but Carter said he isn’t sure what the solution could be.
“I don’t have the answer, to be honest with you,” he said. “We need to take a long hard look.”
Leaders have floated some ideas — largely schemes to increase fees and bring in more money to offset the cuts.
There has been little talk of major overhauls or the merging of some campuses, though state Board of Regents member Bill Fenstermaker, of Lafayette, and Chairman Roy Martin, of Alexandria, have expressed some interest in studying whether the state could offer colleges an opportunity to go private, with the state handing over campus properties in return for cutting ties.
“I would think we ought to look at this, at least,” Fenstermaker said. “I know this is radical, and it changes maybe some of the model, but it also could free up a lot of money for the other institutions.”
Speaking at the conference Monday, Belle Wheelan, president of the Southern Association of Colleges and Schools’ Commission on Colleges, said mergers or closures can save money and have been used in other states to rein in costs but often don’t solve everything.
“It’s not gonna be the immediate fix that some expect,” she said.
The Board of Regents is expected to get a firmer picture next month of what it will be pushing during the session.
“It’s very difficult to budget when, every year, you don’t know what’s going to happen,” Higher Education Commissioner Joe Rallo said.
Among key priorities are proposals that would give schools more autonomy and flexibility by removing control that the state Legislature holds.
“Our institutions are tightly regulated,” said Uma Subramanian, deputy state higher education commissioner for Legal and External Affairs.
She said changes could come up as adjustments to the state GRAD Act, which was adopted in 2010 and gives schools some autonomy over tuition and other key functions as long as they meet state-identified performance benchmarks.
Monty Sullivan, president of the Louisiana Community and Technical Colleges System, said even slight changes — giving schools more flexibility on insurance and purchasing — can add up.
“The autonomies are what matter probably more than anything,” he said.
Higher education leaders, for years, have pushed for control over tuition prices. Louisiana is the only state that requires a two-thirds vote of the state Legislature to increase tuition, though the GRAD Act has provided a pathway for 10 percent tuition increases over a certain period.
But because of the relationship between tuition prices and costs to the state’s Taylor Opportunity Program for Students, leaders have said a proposal to grant schools even further tuition authority is unlikely to be approved this session.
LSU President and Chancellor F. King Alexander said leaders will have to be able to start making decisions the first week of April — at least a week ahead of the session’s start date — about what classes to offer and programs to cut back.
“We have to make these predictions,” he said.
Moody’s Investors Service issued a report last week warning that the state’s universities are ill-equipped to withstand further budget cuts and could see a hit to their credit ratings.
“The timing and magnitude of state appropriation reductions, ability of universities to quickly align expenses with revenue, and degree of financial cushion to absorb operating volatility will factor into our assessment of ratings and outlooks for individual universities,” the ratings giant said in its report. “After five years of the deepest funding cuts to public higher education in the nation and significant expense reductions, these universities are ill-equipped to face additional credit stress.”