Friday, January 30, 2015

Friday, January 30, 2015

Deficit plan delayed; Higher ed looks for budget solutions; Do colleges need structural reform?; and House of (Budget) Cards


Deficit plan delayed

After announcing it would reveal a plan to close the $103 million deficit in the current budget year to legislators on February 6, the Jindal administration announced yesterday it was delaying its presentation until February 20. The Associated Press reports, the administration is “incorporating some new ideas” into the proposal and it would take more time to work out all the details.


The administration and the legislative budget committee must close the gap by June 30. With the delay, cuts will be spread out over less time, which could create difficulties.  At this rate, it will fall to state agencies to wring out $100 million in only four months. Also yesterday, the Legislative Fiscal Office calculated that the deficit reduction plan the administration implemented in December to close a $170 million gap increased the amount of “one-time money” that will need replacing next year from $990 million to $1.1 billion.


Higher ed looks for budget solutions

With as much as $400 million in cuts in store for Louisiana’s colleges and universities next year, higher education leaders are trying to drum up support for ideas to raise more revenue, reports Julia O’Donoghue with Of course, the Legislature and Gov. Bobby Jindal would have to sign-off on any changes, a high hurdle to clear. In addition to pushing a plan to redirect corporate subsidies to higher education, campus heads want the authority to charge different levels of tuition for different degree programs.


It is more expensive for LSU to run a program like petroleum engineering than most liberal arts departments…Differential tuition wouldn’t be very effective though, unless Louisiana’s generous scholarship program — Taylor Opportunity Program for Students — was run slightly differently. TOPS would have to be capped for at least some degree programs, so that the state didn’t end up raising tuition for certain degrees — like engineering — and then paying more out in scholarships to cover its higher costs…Higher education officials have floated the idea of charging higher tuition for certain degree programs in the past, and the Legislature has never approved such a proposal.  


Do colleges need structural reform?

Also writing for, LSU professor and columnist Robert Mann says that Louisiana’s colleges and universities are in need of more structural reforms that go beyond the need for stable state support.


While colleges desperately need new money and students need relief from rising tuition, there are other ways to shore up higher education. Jindal, legislators and higher education leaders could take some important steps now. Most do not involve finding new revenue.


Mann offers seven reforms, including controversial changes like consolidating the five governing boards–which he says lead to “balkanization” and “ turf wars and needless duplication”–and reducing the number of campuses from 14 to a number more in line with other Southern states. He also calls for increasing need-based financial aid and reforming TOPS to rein in its cost, either through raising standards or means-testing the scholarships.


House of (Budget) Cards

Everyone knows Louisiana’s budget has been in crisis for years. Even before the recent drop in oil prices, the shortfall for next year already topped $1 billion. But with the recent dive in severance tax collections blowing over the house of budgetary cards, Stephanie Grace writes in the Advocate, policymakers may not have the luxury of waiting any longer to reform Louisiana’s tax exemptions if they want to save higher education and health care from devastating cuts.


Jindal now says he will offer the Legislature “suggested solutions” that could mitigate huge expected reductions to higher education and health care, the two areas that always absorb the brunt of budget cuts…although he did double down on his hard line against reducing tax breaks, even those that don’t provide clear economic benefit, without any offsetting cutting of taxes elsewhere…


It means that, come this spring’s session, legislators may get a chance to act on all that pent-up frustration, to stop wringing their hands and actually tackle some of the structural problems that perennially plague Louisiana’s budget.


Number of the Day

$1.1 billionAmount of one-time money that will need replacing in the budget next year (Source: Legislative Fiscal Office)