Legislation that would create a mechanism for reining in the cost of Louisiana’s generous TOPS scholarship program won approval from a key Senate committee on Wednesday.
Despite opposition from Gov. Bobby Jindal, the full Senate will now weigh Senate Bill 48, which seeks to establish a base amount that students can receive through the Taylor Opportunity Program for Students. Jindal’s administration views the change as an effective cap on TOPS awards, while supporters of the measure say it protects the program from more drastic overhauls in the future.
“This helps manage the growth of TOPS,” said Senate Finance Chairman Jack Donahue, a Mandeville Republican and sponsor of the proposal. “The baseline stays, and each student gets at least the same amount of money they got the last year.”
Donahue’s bill has been coupled with another proposal — Senate Bill 155 — that would give tuition and fee-setting authority to the college system boards, which are appointed by the governor. SB155 also passed out of the Senate Education Committee Wednesday and will head to the full Senate for consideration.
“I think they have the ability and the intelligence to do that,” Donahue said of handing over the authority.
He said he will only move on the legislation if the TOPS bill continues forward.
Because TOPS awards generally cover tuition costs, tuition hikes have led to the program needing more funding from the state each year. The House Education Committee agreed to similar legislation Wednesday that would give college systems control over some fee- and tuition-setting. All of the proposals would require approval from Louisiana voters.
The Donahue bill, which offers a rare chance at altering TOPS with the backing of many of the program’s most ardent supporters, comes as lawmakers continue to struggle with how to address a $1.6 billion budget shortfall in the coming year that could mean potentially devastating cuts to colleges and universities.
The budget outlook is so grim that colleges say they are preparing for what has been deemed a “doomsday scenario.” That includes researching and early prep work on potential bankruptcy plans.
“Based on the current status of the budget debate, we have decided to begin contingency planning for exigency as many of our campuses may be impacted, as well as other campuses across the state,” LSU President and Chancellor F. King Alexander said in a statement. “We know the worst-case scenario, we know the time frame, and we know what’s at stake. We are optimistic that solutions to mitigate the devastation these budget cuts promise are forthcoming from our state legislators; however, we owe it to our students, faculty and staff to be fully prepared for every possible outcome.”
Southern University System President Ronald Mason said colleges have to be prepared for the worst.
“We’ve certainly been researching the process (of exigency),” he said. “We’ll be taking action as necessary.”
On Wednesday, Moody’s Investors Service announced it had lowered LSU’s credit outlook from positive to stable, citing “limited prospects for sustained revenue growth due to potential reductions in state operating funding, tight state control of tuition pricing and pricing sensitivity limiting out-of-state enrollment revenue growth.”
Phyllis Taylor, the widow of TOPS founder Patrick Taylor, has long opposed changes to TOPS that could impact students, but she’s supporting Donahue’s plan.
“Times change and circumstances change,” she said Wednesday. “We find ourselves today in Louisiana with serious fiscal constraints, and those constraints must be addressed.”
In 2001, TOPS cost the state about $104 million. This year, it will cost about $250 million, and it’s expected to swell to nearly $300 million by 2020.
Donahue said the ballooning cost of TOPS will have to be addressed at some point, as the state is projected to see shortfalls in future years, as well.
“This ensures the longevity of the TOPS program,” he said of his legislation.
But not everyone is on board with the proposal, which squeaked out of committee in a 4-3 vote.
“I think (TOPS) is the best program this state has ever done to get our kids to another level,” said state Sen. Mike Walsworth, R-West Monroe.
He said students have been promised that TOPS will cover their tuition if they meet certain academic benchmarks in high school and decide to stay in Louisiana for college. “I’ve given my word, and I don’t want to go back on my word,” Walsworth said.
Stafford Palmieri, Jindal’s deputy chief of staff, said the administration thinks the change would effectively “disincentivize students” from staying in state for college and break a promise made to them.
“This program has demonstrated its effectiveness in the state,” she said. “TOPS funding and higher education funding are an investment in higher education as a whole.”
If the Legislature were to only partially fund TOPS, the state currently has a process for kicking students off the program, beginning with those who have not filled out a Free Application for Federal Student Aid, or FAFSA. From there, students would be kicked off TOPS based on their ACT scores, said Sujuan Boutté, director of the Louisiana Office of Student Financial Aid.