The leaders of New Orleans’ two public four-year universities offered grim takes Thursday on how they’ll cope with the deep cuts to higher education funding that are being contemplated as state lawmakers work to close a $1.6 billion gap in the state budget.
The University of New Orleans may move to declare a financial emergency for the second time in a decade if it is forced to cut a projected $17 million from its budget for the coming academic year, UNO President Peter Fos said. The number he cited is at the high end of the range of cuts officials in Gov. Bobby Jindal’s administration have said schools should expect. Such a cut would be an overall loss of about 17 percent of the school’s funding.
And Victor Ukpolo, chancellor of Southern University at New Orleans, said SUNO may close altogether if it’s stripped of a similar proportion of the $8 million in funding it receives from the state. Such a cut would eat away nearly a quarter of SUNO’s $18 million budget, he said.
“Our budget has been cut almost 60 percent already within the last six years, and we’ve been doing what we can to stay afloat,” Ukpolo said. “But with this situation, I don’t see how we can stay afloat.”
The $1.6 billion budget shortfall is largely a result of what many lawmakers term a structural deficit, where the state’s revenues annually fall short of its expenses.
In part because of Jindal’s refusal to sign off on any measure that could be construed as a tax increase — essentially any action that increases revenues — the Legislature has been forced to balance the budget each year through cuts and raids on other funds. Falling oil prices have caused the gap to grow by close to $400 million, though the slide is responsible for less than a quarter of the deficit.
“I think that made the situation worse,” Fos said of oil’s price swoon. “I don’t think that made the entire problem.”
Of course, talk of cuts remains speculation until Jindal unveils his proposed budget Feb. 27. The cuts — anticipated for the fiscal year beginning July 1 — would come on top of already deep cuts to Louisiana higher education spending in recent years, among the steepest in the nation. State aid to universities has fallen by more than half during Jindal’s administration.
University leaders across Louisiana have been bracing for cuts in state aid ranging from 40 to 60 percent. To stanch the bleeding, Jindal has said he is considering tuition hikes for some programs, implementing new student fees and giving tax breaks to businesses that donate to schools.
For UNO, declaring what’s known as financial exigency would give administrators the authority to furlough or lay off tenured faculty members, typically with 90 days’ notice. The University of Louisiana system’s board of supervisors would need to sign off on the move by finding the school doesn’t have enough money to support itself without the ability to make such draconian cuts.
It’s a relatively rare step in academia; taking it now would mark the second time the lakefront school has done so in a decade. If the cuts become a reality, though, Fos speculated that a handful of Louisiana schools may have to do it.
“Nobody wants to claim bankruptcy,” he said. “I’m not going to tell you it’s likely, but it’s something that we’re going to have to very, very seriously look at if these cuts come to fruition.”
Still, it’s a risky move, some critics say, because it could scare off current and potential faculty and students. Southern University’s Baton Rouge campus did it in 2011 amid falling state funding and enrollment.
But Fos said the figures are overwhelming: From the 2014-15 budget, a 60 percent cut would slash state funding by $17 million, to just $11 million. UNO received $28 million this year. That would put UNO’s state funding at about 10 percent of its $101 million budget.
Just six years ago, UNO received $74 million from the state.
When it last declared fiscal exigency, in 2006, UNO — then under the LSU system — was staring at $16.5 million in lost tuition and state budget cuts in the wake of Hurricane Katrina.
In the years since, UNO has dealt almost annually with steep funding cuts and declining enrollment. Since taking the helm in 2012, Fos has eliminated about 140 positions.
UNO’s faculty spent much of 2014 looking at ways to trim costs among its 80 degree programs, determining which areas should be shored up and which should be restructured or eliminated.
A working group recommended ending three degree programs and restructuring another 25. Fos went even further by eliminating six academic programs, one department and 22 faculty and staff positions in an effort to save $1 million this academic year and $2.8 million next year.
Fos also cut costs by requiring department chairs to teach more to reduce the need for adjunct faculty members, eliminating 10 instructor positions, reducing UNO’s adjunct budget by $1 million and eliminating four positions in the library.
By his math, every $1 million that’s cut from UNO’s state funding means about 12 people will need to be laid off.
Additional cuts were already expected as part of the reorganization process, including another 15 positions and five academic programs, while another five programs likely will be merged.
Taken together, Fos said, that plan was beginning to get UNO back on better financial footing — raises and increases to travel budgets and scholarships were within view in the coming years — but now talk of sharp state funding cuts has hit him like “a blow to the gut.”
Now, he’s wondering what else is left to trim.
“I’m running out of staff to lay off or terminate,” he said Thursday.
Follow Richard Thompson on Twitter, @rthompsonMSY.