How bad is the financial crunch at Louisiana’s colleges and universities? So bad that at Nicholls State University, appropriations from the state are no longer enough to cover all “mandated” costs – money that goes back to the state to pay for pensions, security, health benefits and the like. While Nicholls is an extreme example, The Advocate’s Mark Ballard reports that a dozen institutions use 80 percent or more of their state appropriations for mandated costs, a price tag that keeps increasing even as appropriations are flat.
“It’s the smaller schools that are getting hit the hardest,” said Tony Clayton, a longtime member of the board which oversees the Southern University System schools. “It’s shocking to me that the Legislature is willing to put out a plan that allows the state to claw back the money that they gave to educate our children and prepare them for the workforce,” he added. While thankful for standstill budgets this year, the money provided probably won’t cover the projected increase in costs for insurance and retirements, said Jim Henderson, president of the University of Louisiana System, which oversees nine four-year universities with 90,000 students. “Essentially we’re balancing the state budget with tuition and fee increases on students,” Henderson said.
Honesty in state budgeting
With a slew of temporary taxes expiring, the budget shortfall for the 2018-19 fiscal year has been pegged at $1.5 billion. That’s the gap between what it would cost to keep state government running at current levels and the revenue the state expects to collect, after factoring inflation into the mix. But state Sen. Jim Fannin of Jonesboro, reflecting the views of a disturbingly high percentage of his colleagues, says he doesn’t believe the gap is that high. The Advocate’s editorial board is not pleased:
We certainly don’t agree with everything done by the Legislature or new Gov. John Bel Edwards over the past year or so, but this ridiculous denial of the realities of the budget problem is chronic among legislators who ought to know better – none more so than Fannin. You can, as lawmakers frequently do, fail to fund things. The Jindal-Fannin method was to ignore inflation, throw one-time money into accounts to cover recurring expenses. That was a recipe for disaster. The disaster has now occurred.
Rolling back energy regulation
While President Donald Trump’s legislative agenda has largely stalled on Capitol Hill, his appointees have made substantial progress in rolling back Obama-era regulations meant to safeguard the environment and public health. As Ben Lefebvre reports for Politico, the deregulation push is happening too fast for some oil and gas corporations.
Among their fears: Laxer rules could set the stage for an environmental disaster like 2010’s BP oil spill in the Gulf, which blackened the industry’s reputation and spurred a regulatory clampdown. “Every industry wants regulations that make sense, but you don’t need to roll things back so far that it opens an opportunity for outsiders to criticize, or something bad happens,” said Brian Youngberg, an energy analyst at the investment firm Edward Jones.
The dumbest tax break
Louisiana has hundreds of tax breaks and other giveaways that collectively drain billions of dollars in potential revenue from state and local governments each year – money that could be used to fund schools, parks, public safety and other important needs. One of the smallest of these tax breaks – costing the state $2.8 million this year – is also one of the least effective: sales tax holidays. Louisiana has three of them – including a three-day period to buy firearms, starting on Friday. Again, The Advocate’s Mark Ballard:
The Tax Foundation cites several studies that show annual sales don’t increase, regardless of how often the cash register rings on a tax holiday. The findings indicate that consumers may wait a week or two, but they’re still buying what they planned on buying. The result is a tax break that favors specific items at the expense of others, according to the Tax Foundation, a Washington, D.C., think tank founded by some of the nation’s largest corporations. The 80-year-old group released a report in late July condemning the holidays as a political expediency and not “a sound tax policy.” Only 16 states still have the holidays after Georgia and Massachusetts dropped them earlier this year.
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