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The other side of the story

To say what’s happening to Louisiana’s higher education system in 2010 is ironic is an understatement. At a time when state government has finally taken a firm lead in transforming the dismal state of elementary and secondary education – especially in New Orleans – it’s hitting already reeling colleges and universities with budget cuts.

The state recently cut $84 million from higher education to close a $247 million gap in the 2009-’10 budget. The reductions started at the beginning of the fiscal year in July, but the mid-year cuts are more difficult to manage because they must be taken from only six months of revenue. Institutions have learned from past lean years to save a little for a rainy day, but what’s coming in ’10 may be Katrina-sized devastation.

Worse yet, years of shortsighted legislative decisions caused this unfolding fiasco.

With the state forecasting a billion-dollar shortfall in the 2010-’11 budget, colleges and universities are bracing for the worst. The state constitution protects funding for elementary and secondary schools, but higher education gets no such protection. Last year, Commissioner of Higher Education Sally Clausen told the Board of Regents, the state’s coordinating board of higher education, that if the economy doesn’t turn around, higher education will be required to cut $440 million by ’12.

The modern economy has gone past just needing workers who can read, write and compute well; it needs a trained work force. A string of governors and other politicians have pledged to invigorate economic development – to attract cutting-edge jobs – but they can’t do much of that with a crippled higher education system. What desirable industry would want to locate to a state that turns away or poorly educates willing college students?

Do not think that scenario is unlikely. Delgado Community College turned away 1,500 students in fall 2009 because it didn’t have enough teachers and classrooms due to an unexpected surge in enrollment. The Daily Reveille, Louisiana State University’s student newspaper, reported last year that the LSU system submitted a “worse case” budget last year – not yet fully carried out – that included reductions of 518 faculty and 916 support staff on its five campuses and Agriculture Center. The LSU system includes the University of New Orleans.

If Baton Rouge doesn’t find a way to avert or reduce next year’s projected cuts to higher education, students will attend overcrowded classes or not get the courses they need at all.

Officials say they have no choice. But many of these problems are of the state’s own making. Poor planning goes back decades, but contemporary leaders in Baton Rouge can’t seem to learn from past mistakes. Much of this situation could have been avoided if politicians paid attention to economic trends and made decisions based on what was best for the state in the long run rather than supporting popular measures that jeopardize the state’s future.

Cases in point:

The state overbuilt expensive four-year universities for its size and added campuses through the years without ever addressing the original problem.

Legislative interference with how colleges and universities determine tuition has led to the lowest tuition rates in the southern region and hampered colleges’ and universities’ ability to offset state cuts with self-generated income.
The Legislature adopted a student scholarship program called TOPS that it can’t afford.

Officials cut taxes knowing that surpluses created by Katrina recovery wouldn’t continue.

State officials have long known that Louisiana has too many expensive four-year colleges for its population. The state supports a four-year institution per 294,053 residents. North Carolina, which operates one of the country’s most respected public university systems, has one per 576,400 residents. Common sense says to downsize and put the savings into properly supporting what remains, but it’s almost impossible to close or merge campuses once established. It takes a two-thirds vote of the Legislature to close or merge campuses and representatives and senators would fight to save the ones in their districts.

In addition to bloat, college tuition has remained much lower than most other states in the Southern region. Southern Regional Education Board figures show that the median annual tuition and fees reached $5,000 in 2008, compared to Louisiana’s median cost of $3,600. Adjusting for inflation, tuition rates have grown 74 percent in the region since 1998, compared to an increase of 34 percent in Louisiana.

Low tuition is good news for students’ pocketbooks, but the quality of the product is diminished when taxpayers don’t pick up the rest of the tab.

Louisiana’s tuition rates haven’t kept up with the southern average because raising them usually requires a two-thirds vote of the Legislature. The Legislature has allowed some tuition boosts recently, but not enough to offset state budget cuts. Keeping tuition rates low plays well with voters so getting a two-thirds vote to raise them isn’t easy.

A related issue is the TOPS scholarship, which provides free tuition to Louisiana high school graduates who meet certain academic standards. When the Legislature raises tuition, the action also increases the cost of TOPS, now about $130 million a year. The program has resulted in some benefits such as improving college retention and closing the achievement gap between white students and minority students. However, statistics show that 38 percent of the students receiving the grants come from families with annual incomes above $100,000.

All attempts to curb the excesses of the TOPS program have failed for obvious reasons. Fiddling with this popular program could bring political backlash from middle class voters who benefit from it. Because TOPS has proven beneficial in some areas, the issue isn’t eliminating it, but how to reduce the cost. Capping the amount that a student can receive would contain costs and allow institutions to increase tuition without draining state coffers even more.

The above problems might be manageable if the Legislature, with Gov. Jindal’s blessing, had not rolled back tax rates in 2008. The action gave some income tax relief to most taxpayers – especially those in the higher brackets – but the end result was a then-projected loss between $300 and $350 million in state revenue in 2009-’10.

At the time of the rollback, the Public Affairs Research Council said that the action would make the state more reliant on oil and gas revenue. The change “sets the state up for another boom-and-bust cycle,” PAR said.

PAR was dead on right. Those lost tax dollars would have gone a long way in cushioning the state from the Great Recession and preventing the current bloodletting to higher education.

Ed. note: In a surprise move made after press time, Gov. Jindal’s proposed 2010-’11 state budget doesn’t include drastic cuts to higher education.

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