Higher education officials felt a little easier about the legislative session Friday following Gov. Bobby Jindal’s proposal to drum up new cash to avoid widespread impact to college programs.
The hefty size of the shortfall leaves higher education and health care services, which are the least protected areas of the state’s budget, most at risk to the chopping block. College leaders have worried that their campuses could be devastated with widespread layoffs and program closures.
To help close the shortfall, Jindal proposes to spend $526 million less on refundable tax credits, in which the state often pays out more than the taxes a person or business owes. The governor wants to rework 12 tax credits so the state doesn’t pay more than the tax liability.
Louisiana House Appropriations Chairman Jim Fannin said while the proposal is something the governor will support, it still takes the vote in the Legislature to get it to his office.
The savings from cutting back refundable tax credits would be split, with $150 million going to health care and the remaining $376 million going to higher education, according to Commissioner of Administration Kristy Nichols, the governor’s top budget adviser.
But that still leaves $200 million that higher education needs to make up, Fannin said.
“Higher ed may be able to self-generate some of the difference in dollars, but there’s nothing guaranteed about that $376 million. It’s a reasonable option, but it still has to pass the legislative process. It’s still early on in the process, and we don’t know what members will support it though I know the Legislature won’t let higher education drag. Every dollar has a constituent, and to get rid of some you are going to have to take votes. At the end of the day I feel confident we will have a bill that may not give everybody everything they want but keeps the state moving in the right direction,” Fannin said.
University of Louisiana at Monroe President Nick Bruno said reducing the amount of expected reductions was good news; however, there remains work to be done.
“I do not have specifics, only that the reduction is approximately $140 million as outlined by the preliminary budget presentation. It is imperative that all cuts to higher education are eliminated, and we are allowed to retain any tuition increases we may institute,” Bruno said.
He’s unaware how much of the proposed reduction would come to ULM, which, along with other higher education institutions, has absorbed $700 million over the last seven years.
“Further cuts of any amount will further impact our ability to provide the workforce needed to supply the region’s workforce. With the demand for individuals with degrees increasing across the state, higher education needs more resources to assure our companies have the workforce they need to be successful. Louisiana has done a great job recruiting businesses, It would be counterproductive if we cannot provide the educated workforce those companies need,” Bruno said.
Lawmakers may be asked to consider fee hikes on college students, businesses and drivers to drum up new cash without violating Jindal’s rule against tax increases.
Students have had their tuition raised considerably to offset reductions in state support. Some students can afford these and further increases; however, many cannot which will result in less students receiving degrees, Bruno said.
“This will also require students to borrow more to fund their education. This will result in students having higher debt loads which will impact them as they begin their careers,” Bruno said.
Louisiana Tech President Les Guice said the Tech family is encouraged about Friday’s announcement and the support from the governor and legislators to ensure higher education institutions are able to continue to serve students and be an economic driver for communities
“That support is critical to the future of Louisiana Tech, and our ability to serve the students and prepare the graduates who will lead our state forward. Louisiana Tech’s focus continues to be on creating growth opportunities for our students as well as for our industry partners who rely on our institution for talent development and innovation collaboration. The governor’s announcement is encouraging, and we are grateful for the emphasis that has been placed on supporting higher education and its invaluable impacts on community and economic development in Louisiana,” Guice said.
University of Louisiana System President Sandra Woodley said higher education officials are encouraged by the executive budget that proposes scaling back $526 million in corporate tax credits to help offset a $1.6 billion shortfall.
“We are encouraged by the administration’s willingness to identify revenue options that could alleviate budget reductions to higher education. We are in the process of digesting all of the options laid out in the governor’s executive budget to examine how it addresses our collective goal of maintaining current funding levels with minimal burden on our students. This is the starting point of a long process of working with the administration and legislators, as most of the revenue proposals are contingent upon legislative action,” Woodley said.
Grambling State University president Cynthia Warrick could not be reached Friday.
Follow Scott Rogers on Twitter @lscottrogers.