Higher education officials are optimistic that the final cut to Louisiana’s colleges and universities won’t be as high as recently has been suggested, but if it stays up anywhere near the level proposed, several schools will have problems functioning next year.
“These cuts are not just cuts. These cuts go well beyond what we typically talk about as budget cuts,” said Sandra Woodley, president of the University of Louisiana system, in an interview Thursday.
The state government won’t know exactly how big next year’s budget hole is until later in January. Currently, Louisiana has a projected financial shortfall of $1.4 billion next year, but that deficit is likely to grow as a result of dropping energy prices.
For every dollar the price of a barrel of oil drops, Louisiana’s government loses between $10 million and $12 million for its annual spending plan, according to state economists.
“We really don’t know what the [higher education] cuts will be until the end of the month,” said Roy O. Martin, the head of Louisiana’s Board of Regents, which oversees all of the state’s higher education institutions.
Nevertheless, higher education leaders said colleges and universities been asked to prepare for as much as $384 million in reductions. While officials are optimistic that number will come down, a cut of anywhere near that magnitude would be devastating.
To put that reduction into perspective, the public funding for the entire community and technical college system this year is only $308 million. Officials said 16 public campuses will struggle mightily — and might not be able to keep the doors open — if a $384 million cut came to pass.
“If you cut 60 percent of the budget for some of these institutions, they aren’t going to be able to make payroll,” said Woodley. “When you take that much out of your budget that quickly, it’s hard to make the math work.”
From a practical standpoint, it’s very unlikely the Louisiana Legislature would agree to close any campus or school. State lawmakers are up for re-election this year and shuttering a local college or university is politically untenable. This is why many believe the magnitude of the cuts won’t total $384 million in the end. Legislators will find money to keep all the institutions open.
Still, LSU president F. King Alexander said even if the marginal campuses stay open, they might be operating under unprecedented financial strictures. Many more schools would have to deal with a budget crunch similar to the one seen at the University of New Orleans recently.
“It’s very rare to have one campus in a state go through that [financial stress], let alone 16 campuses,” said Alexander.
The 16 sites in question include three University of Louisiana campuses and six community and technical colleges. Pennington Biomedical Research Center is also on the list, in part because the facility doesn’t draw tuition dollars from students and can’t generate as much revenue on its own as a college.
“Pennington does operate very close to the margin. … It’s not about closing Pennington. It’s about mitigating those cuts,” Alexander said.
Yes, politics already makes it unlikely any Louisiana colleges and schools would be closed, but it also just might not be financially beneficial to do so. Closing a campus doesn’t save much money in the short term, and Louisiana needs immediate budget relief.
“It would take half a year to a year before you would have savings,” said Woodley of shutting down schools or institutions.
Still, large budget cuts could leave the 16 marginal campuses vulnerable to other problems, including loosing their accreditation, according to Woodley. If a school is no longer accredited, students can’t draw down Pell Grants and other forms of financial aid to attend the institution, she said.
“Some schools, they have a very thin margin to handle the cuts,” Woodley said.
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Julia O’Donoghue is a state politics reporter based in Baton Rouge. She can be reached at [email protected] or on Twitter at @jsodonoghue. Please consider following us on Facebook at NOLA.com and NOLA.com-Baton Rouge.