LSU must grow and become more entrepreneurial as it reduces its reliance on state funding, LSU Chancellor Michael Martin said Tuesday.

Martin discussed “The Future of the Flagship” at LSU’s Breakfast to Business speaking series at Café Américain on Jefferson Highway.

“We have to reduce the dependency on state appropriations,” Martin said. In addition to increasing tuition, LSU is planning to brew its own beer, he said.

Just a couple of years ago, LSU was a little more than 50 percent reliant on state support, he said. Now, about 48 percent of LSU’s budget is state government funding because of budget cuts.

The university must grow its self-generated revenues to the point that only 25-30 percent of its dollars come from state government, as is the case with most of LSU’s top peers, Martin said.

“People think that means we’re going to pass it all onto the students, and that’s not so,” Martin said. “But I do believe students can pay more.”

Martin added, “In all candor, I believe students work a little harder when they have a little more of their own skin in the game.” LSU’s annual tuition and fees are increasing from $5,764 to nearly $6,350 this fall.

Martin said merit-based TOPS scholarships, federal, need-based Pell grants and LSU’s own Pelican Promise help fill the financial gaps.

LSU is expecting to break the 29,000-student mark this fall, he said, but the plan is to eventually grow back to LSU’s past peak of about 33,000 students.

Because of on-campus housing shortages, the old Kirby-Smith Hall is being reopened this fall.

“We’re marketing it as a historic international experience,” Martin said of the dormitory built in an utilitarian style popular when it opened in 1965.

“It’s a chance to live in the Soviet Union,” Martin said with a chuckle.

LSU will more “steadily and strategically” recruit top academically eligible students, Martin said, which is a reason applications are down from last year’s record numbers. But LSU also will recruit internationally and from community colleges more, he said.

In addition, the university is getting creative in generating its own revenues, including getting into the business of brewing its own LSU brand beer, Martin said.

“We are in the brewing business,” he said. “Our students are working on that.”

The project that Martin has long discussed as a possibility is a partnership with the Tin Roof Brewing Co. and Mockler Beverage and could begin distributing later this year, according to LSU.

LSU also must grow the university endowment from the $340 million it is now to $1 billion, Martin said. “The passion for this place is remarkable, and we need to feed that passion,” he said.

Martin said the university is working to push its faculty and graduate students to generate more business ideas and research, or intellectual property, called “IP,” that can be developed into marketable products.

“We’ve not been very successful at promoting IP, because it’s just not been part of the culture,” Martin said, citing the famous example of Gatorade being developed at the University of Florida.

“We’ve got to be more entrepreneurial in other ways,” he said.

But LSU also must protect its academic core, Martin said, as budget cuts have hurt the university. “We’re seeing the erosion of some very good faculty picked off,” he said.

Fortunately, he said, budget cuts this summer were not as bad as predicted and LSU can continue to uphold its promise to properly educate students in a flagship, research university environment.

“It’s a contract — it’s a covenant — and we try to stick to that,” Martin said of LSU’s promise to students.